Contagion Of 1907

(Conspiracy Nation, 09/25/07) -- “There is no contagion,” U.S. officials assured during the August 2007 financial panic. (“Figuring Out August 10th”, http://www.shout.net/~bigred/Aug10.html). “Contagion” is defined as “significant economic changes in one country spreading to other countries.” (investopedia.com). It can also mean troubles in one economic sector affecting other economic sectors. For example, troubles in the housing sector causing consumers to cut spending and thereby hurting the retail sector.

This “contagion” also features in the Panic Of 1907. It has now been exactly 100 years since The Panic Of 1907. By October 1, 1907, a liquidity strain had triggered a sale of U.S. securities. By mid-October 1907, United Copper had “broke amid wild scenes.” This led to “falling dominoes.” (“Saudis Defy Bernanke Cut,” http://www.shout.net/~bigred/SaudisDefy.html)

The theme of “contagion” is prominent in Robert Bruner and Sean Carr's new book describing the Panic Of 1907. They call it “complex systems.” For example, the “markets for stocks, debt, currency, gold, copper, and other commodities form such a complex system – they are interrelated in the sense that fundamental changes in one can affect prices in the others.”

Bruner and Carr cite a book by Henry Clews, published in 1908 (Fifty Years In Wall Street), which analyzed the tangled web of 1907 markets. Causes of the Panic Of 1907 are listed as (1) high finance manipulation in advancing stocks; (2) capital having largely gone into real estate, thereby losing its liquid quality; (3) injudicious loans by Knickerbocker Trust Co.; (4) dumping onto the market of almost $1 billion (1907 dollars) in securities; (5) after-effects of the San Francisco earthquake of 1906; (6) life insurance companies overextended; (7) troubles at Metropolitan Street Railroad; (8) an “absurd fine” levied upon a corporation having limited capital; and (9) ICC investigation of the “Chicago & Alton deal.”

Trouble in these various sectors coincided and produced a perfect storm. Bruner and Carr literally describe the Panic Of 1907 as a financial “perfect storm.”

Challenging the current notion of there now being no “contagion” is Senator Charles Schumer (a.k.a. “Chuckie Schemer”). “Despite all the reassuring statements we've heard from the administration that the impact of this [subprime] mess would be, quote, 'contained,' it hasn't been contained, but has been a contagion that has spread to too many sectors of the economy.” (216 Hart Senate Office Building, September 19, 2007)

In the realm of “contagion” there can be placed the physics concept of the “butterfly effect.” A butterfly flapping its wings on one side of the globe affects circumstances on the other side of the globe.

Ben Bernanke and the “Federal” Reserve dramatically cut a key rate. A downward spiral in the U.S. dollar accelerates. U.S. Treasury bonds become less attractive to investors. To lure back investors, intermediate and long-dated bond yields rise. This, in turn, further cripples the housing market by raising mortgage rates. (“Kass: Bernanke Made A Big Mistake,” http://www.thestreet.com/s/kass-bernanke-made-a-big-mistake/markets/activetraderupdate/10380295.html?puc=googlefi)

“Oops. My bad,” says Ben Bernanke, as he packs his suitcase and returns to Princeton.

David Crane gathers the “complex systems” having likelihood of suffering “contagion” under the heading “globalization of finance.” Globally connected financial markets and high-speed technology mean that one nation’s financial crisis can affect the entire world very fast. (“Global Risk of US Credit Crisis – Part II”, YaleGlobal, September 24, 2007)

Red China exports dangerous lead-paint toys. Rivaling that, notices Crane, is the U.S. export of “complicated financial instruments.” Fears about these securities “have fueled a contagion effect.” The lead paint financial instruments lately have no purchasers. Banks become suspicious of other banks: How much bad debt do they hold? The banks start to hoard cash. There is “a liquidity squeeze and a credit crunch for normal borrowers.” (Crane, op. cit.)

The global “mind” will be compartmentalized. Independent components will be separated from each other. The whole of civilization rests on the male's ability to compartmentalize his mind. The premise of mind control is to compartmentalize the brain. Unless there is contagion. On Saturday, September 15th, Alan Greenspan defied the box borders. (“Greenspan Enters Saturday Box,” http://www.shout.net/~bigred/SaturdayBox.html). It was a Greenspan contagion.

In 1969, the avante-garde band King Crimson foresaw the compartmentalization against contagion in their song, “21st Century Schizoid Man.” Financial contagion is battering the compartment walls and leaking in. The whole of civilization rests on the male's ability to compartmentalize his mind. Some have faith the “Fed” can be Almighty interferer. Others have lost faith in Mighty “Fed” power. The “Fed”, declares Axel Merk, “is nothing but a small, and in this case almost irrelevant, participant in the markets.” (“The Federal Reserve’s interest rate cut does not help Americans,” http://www.merkfund.com/merk-perspective/insights/2007-09-25.html)

Get that: The “Fed” has become almost irrelevant. The Panic of 1907 resulted in “a powerful central bank in the United States through the Federal Reserve System,” observe Bruner and Carr (op. cit.). Now, exactly 100 years later, the “Fed” is becoming irrelevant.

As the financial contagion spreads, the compartments will break down. The compartmentalized, schizoid mind is also likely to disintegrate. When that happens, the so-called normal people might really flip out. This could mean World War III and even “tactical” nuclear attacks. How far will 21st Century Schizoid Man go to hide from the Truth?

Conspiracy Nation

http://www.shout.net/~bigred/cn.html