Paralysis in the Banks!
Published in Al Ahram
(Egypt) on 17 March 2009
by Salah Montaser (link to original)
(Egypt) on 17 March 2009
by Salah Montaser (link to original)
Translated from
by Mahitab Adham.
Edited by Katy Burtner.
The last American administration of President Bush did not consider the effects of the announcement of the Lehman Brothers bankruptcy. The administration did not take any action, under the pretense that this was the movement of a free market. Maybe it did not want to leave before making the world sink into a severe crisis, or it intended to do that so it would not be the only country that sunk in the swamps of Iraq and Afghanistan. Thus, the administration wanted the crisis to be generalized to the whole world!
In fact, the day after Lehman Brothers, which was one of the largest investment banks in the world, announced bankruptcy, the banks and firms that invested in it lost, at a glance, $720 billion. The universal money markets became fearful, which made all of the banks stop lending to each other. These transactions happen daily. For example, a bank in Hong Kong lends to a bank in Belgium and vice versa. Thousands of transactions were completely stopped as other banks feared that they could fall since Lehman Brothers bank fell. Accordingly, the money markets witnessed a serious recession for more than one month from September 16th until late October because the banks stopped all kinds of lending procedures, whether between the banks or to individuals and projects.
Furthermore, many banks claimed their money from debtors, which resulted in paralyzing the universal economy and led to threatening thousands of factories, as well as laying off millions of laborers, thus increasing unemployment.
This situation continued until the American Federal Bank and the European Central Banks intervened and pumped in $9 trillion (a trillion is a thousand billion and a billion is a thousand million). And if the gross mass production of the world reaches $34 trillion, that means the Central Banks have pumped so far around one third of this production in order to support the banks.
On the other hand, millions of depositors were consumed with fear to the extent that they went fast to the banks and took their money out. Thus, the biggest trade in the U.S. became the trade of private coffers, alarm systems and monitoring cameras at homes after money owners found that keeping the money is much safer than putting it in banks, which can declare bankrupt at any time. But the situation in Egypt is different!
In fact, the day after Lehman Brothers, which was one of the largest investment banks in the world, announced bankruptcy, the banks and firms that invested in it lost, at a glance, $720 billion. The universal money markets became fearful, which made all of the banks stop lending to each other. These transactions happen daily. For example, a bank in Hong Kong lends to a bank in Belgium and vice versa. Thousands of transactions were completely stopped as other banks feared that they could fall since Lehman Brothers bank fell. Accordingly, the money markets witnessed a serious recession for more than one month from September 16th until late October because the banks stopped all kinds of lending procedures, whether between the banks or to individuals and projects.
Furthermore, many banks claimed their money from debtors, which resulted in paralyzing the universal economy and led to threatening thousands of factories, as well as laying off millions of laborers, thus increasing unemployment.
This situation continued until the American Federal Bank and the European Central Banks intervened and pumped in $9 trillion (a trillion is a thousand billion and a billion is a thousand million). And if the gross mass production of the world reaches $34 trillion, that means the Central Banks have pumped so far around one third of this production in order to support the banks.
On the other hand, millions of depositors were consumed with fear to the extent that they went fast to the banks and took their money out. Thus, the biggest trade in the U.S. became the trade of private coffers, alarm systems and monitoring cameras at homes after money owners found that keeping the money is much safer than putting it in banks, which can declare bankrupt at any time. But the situation in Egypt is different!
Previous article![]( "Madoff In Jail")
Next article![]( "The Two Forces in Obama’s Diplomatic Team")
