Contribution to the Economic Situation of the Nation and the sustained combating of the Super-Recession

Author Ernst Munk

german

Why is the most important national Task of the German Economic and Finance Politics since 2004, the implementation of the Prophylaxis against Insolvency for State, Economy and Finances? And what would a Masterplan for fighting and lastly overcoming the “World Wide Economic Disaster“ look like?

Master Plan for the Restructuring of the World Economy

Have we reached the end of the Finance and Economic crisis? No!

Is it admirable courage or irresponsible rashness. Some voices in the confusing landscape of the German Economic Journalism are proclaiming, since weeks, the end of the financial- and economical crisis, which began with the fall of the Lehman Brothers bank October 2007. What is one to think about such optimism? Whoever proclaims that the worst is over, is playing va banque with the wealth of the German people. The great depression is far from  subsiding. On the contrary. The crash after the crash is more likely to occur than a rapid recovery of the National or the International Economy. It is for this reason that Horst Koehler, President of the Federal Republic of Germany and former president of the IWF strongly cautions against a “business as usual”. Rather, the people and the Government must know and learn that the safeguarding and the defence of the People’s Wealth requires a new quality of fault analysis, self-criticism and painful adjustments in their beloved statuses and that it will be the Good Bye to wasteful use of resources, beloved bad habits and expansive vanities which Germany, the USA, Europe and the rest of the western oriented industrial countries have enjoyed for a long time. Also the billion-heavy subsidizing of ramshackle, over aged industries and the continuous subsidizing of social funds which otherwise would not survive, is over!

The slump in the Economy 2008/2009 is worse that the crisis of 1929!

The slump of 2008/2009 already today is much larger than the distortion experienced 1929. The reduction of exports in Japan is 54%, in China 25%, in Germany 21%. Slowly it begins to dawn on our policy makers in Government and Economy that we have not reached the bottom of the pit by the end of 2009 as stated by some. The worst is still to come! The crash after the crash. For this reason the destruction of unimaginable capital sums, and the consequential impoverishment of the people, nations or even economical blocks is not even the end of the catastrophe.

The virus of insolvency has been with us for more than a decade. The Council of Government Advisers, BAFIN (Federal Financial Supervisory Authority of Germany), the German Central Bank, the Federal Government, all were appraised of the situation, but non had the courage to act.

A decade ago the reason for the global catastrophe for the Finance and the Economic system were created. The Federal Government of Germany, the other G 20 Nations and their reserve banks were their perpetrators. Out of these the blame rests firmly with the Federal Reserve Bank of the USA. The Asset Backed Securities, the Futures, the Subprime Packages and the Swaps were the derivates with which the Big Five Global Players, almost by themselves and with e-mail speed were playing the Market. But also German banks and insurance companies were involved. It was the time of the New Market, of the emission of the Telecom shares, of the Heyde shares in Bad Nauheim and that is not really so long ago. Dr. Nicole Munk in her book  “Prophylaxis against Insolvency”(2004) for the first time proposed a plan to combat the virus of insolvency and described the harmful mechanics which massively undermined the German Pension Funds and the wealth of the people. In spite of the fact that the Scientific Service of the Parliament and RISK NEWS Magazine for risk management in their October/Nov. 2004 issue, warned of the impending problem neither the Federal Government of Germany nor the managers of the banks were prepared to make a step in the right direction.

Over many years we have warned of such a crash, but the warnings went unheard. Instead a total belief in the delusion of a boundless expansion of money was pursued. More than a thousand Billion Euros could have been saved for the German Economy!

In hindsight it is evident, that with our many articles published since 2000 (among others on the German Telecom share issue, the madness of the New Market, the under capitalization of banks and insurance companies) we had fair accurately diagnosed the situation and prognosticated that with the expected super recession and its mechanisms world wide the unimaginable amount of 40 – 57 Trillion US$ were annihilated. In Germany alone, since the issuance of the book “Prophylaxis against Insolvency”(2004) at least 1000 Billion Euro of Liquidity were lost in spite of our warnings forwarded to the Federal Government of Germany, the banks and the insurance companies holding huge blocks of shares, notes and funds. That is money which is presently painfully scarce in the cycle of the German National Economy, and which is of course the reason for the credit squeeze. In fact it is consequence of the grotesque Failure of the Federal Government, the State Banks, BAFIN (Federal Financial Supervisory Authority of Germany), the Council of Government Advisers, the German Central Bank and many others in responsible positions. The Billions of Euro spent to save the banks from going under, will take decades to recover and the unimaginable wave of insolvencies will destroy vital parts of the German National Economy unless a radical turn about takes place. At once, complete and without consideration of particular interests of groups such as associations, lobbyists and all others. Therefore we had no option but to put together the continuation of the “Prophylaxis against Insolvency for Germany”(2004) i.e. to publish the “Master Plan for the World Economy”.