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The Global Banking Financial Crisis's And Its Impact On Developing Nations: Case Study Africa
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For several decades the public has witnessed the shift of world global economic policies from countries' production and stable economic indicators, to wild crazy speculations and market derivatives created to hide the real cause of economic instability which is the printing of the fiasco money and fiscal policy! Plainly stated we cannot continue to run and hide, the problem will not eradicate itself. We have no other alternative than to face what rulers of globalization have created and the consequences.
The FED and the Bank of Japan, have for decades, pioneered the premise that to stabilize an economy more money must be printed. This extra money can be used to fight inflation and other economic pitfalls. The European Central Bank has followed the cause with competition and even surpassed others in the last 20 years by its creation and printing of money to become one of the Apex Printing Houses followed by the Bank of China for the same reasons previously mentioned.
Questionably, these Western Banks remain loyal to their historical creators instituting policies advantageous, beneficial and profit seeking for industrialized countries. At the same time Western Banks overlook evaluation, comparison and diversification of economic policy to further destruct and annihilate the working class general populations of developing countries. In short, the paternal countries do not want to institute policy that will create self-sufficiency in subordinate countries.
The crisis that officially started in 2007 and 2008, that which was highly publicized as a global nightmare in the media was portrayed as inconsequential to African countries; they were unaffected. In fact, this was not the case, it is a complete fabrication and this fabrication caused the world to overlook an already impoverished African nation. Africa was depicted as maintaining more than $200 billion dollars on deposit while the crisis of 2007 affected most of the world as a downward catastrophe. Only the insiders and economic intellectuals peered through the maze of fog set forth by the media to realize the $200 billion that was qualified was in fact only 3% cash and 97% investment in toxic assets; the very same assets that affected and caused chaos in most all other nations because the assets could not be liquidated.
The media's false advertisement will have a long term effect on African nations and other developing countries because the false advertisement grossly fails to indicate and note the reserve fund phenomenon. Countries like African nations are living off of reserved funds much like the body lives off itself when we have no food to eat. Soon the country like the body will become weak and disfigured, bloated and dysfunctional. Essentially, developing countries will become dearth as the reserves become depleted and insolvency persists. When insolvency occurs, mainly due to mismanagement and bullying by Western Banks and political affluent, will these developing countries be reimbursed? It is highly unlikely these developing countries supported their reserves with a structured insured financial vehicle.
According to Dr. Amouzou, President of MSA Investment Trade & Management, developing countries will face insurmountable challenges in the very near future, some are:
Depletion of their reserve funds and credit stagnation; credit stagnation or the inability to receive funds from institutions will ultimately have the impact of increased debt because the depletion will make it more difficult for the country to service institutions like Commercial Banks, Private or IMF in the circular conundrum. Will the World Banks be dissolved or will they still provide revolving credit after the bank Tsunamis crisis?
Definitely the reserve funds for developing countries will at some point in the near future disappear but with their demise comes a catastrophic consequence; while the credit dissipates, the associated debt will revolve causing serious socio-economic problems. Further political instability in developing countries will reinforce diversion between nations encouraging disorder, dysfunction and disparity; essentially the haves and have nots will be at odds. The haves will be reluctant to bail out the have nots to solve the problems created by the Global Economic Finance policies.
After the collapse of the Financial banking system, we are going to hear again from the media and news that the Occident (The Club of Rome, Club of Paris, IMF, World Bank; Bilateral Agencies; etc.) are preparing several meetings to help the developing countries that are affected by the crisis, to cut in half the debt service, to forget them completely or to cut down the principal of the debts in half? It is an intellectual screw, scam, crime! Did the westerner's Government through their bankers reimburse the Developing countries for the lost funds deposited into their countries? Who is going to be responsible for these losses? At the same time Western banks will revolve the debt owned by these countries and hold them hostage by exorbitant interest rates; the proverbial double standard that will spiral these countries into a modern slavery paradigm!
This situation has previously occurred during World Wars I and II and the associated aftermath. During these wars while African countries were not physically involved in the wars they are manipulated by Westerners who have transferred the debt of these wars into developing countries. This done by capturing and mobilizing their resources, food and manpower so that they are delivered to the Westerners to support its survival. How many people in developing countries need to die so that the Westerners may live?
It seems that developing countries will once again have to assume the fallout of mismanagement and flawed policy and prepare to pay or finance the loss of Western Bank and Governments again. This situation is going to put the continents of developing countries back one hundred years; this is not development its counter-development. Some African leaders lack vision and confuse development initiatives in their countries as personal achievement; this one man show attitude often leaves the general population in total abject poverty.
Stated by Dr. Mehenou Amouzou, the alternative choice for developing countries is to give instruction and direct orders to the reserves funds Managers they are willing to buy; gold, silver and other natural resources. They should further request these precious metals be transferred and hold them in safekeeping in their own countries. As a security measure, to hedge against loss the developing country should diversify and hold some of their reserve in other currencies for example Singapore Dollar, Hong Kong dollar, Norway currency. Bank of China has been using its reserve funds in USD, YEN and EURO to buy a lot of gold and precious stones in anticipation the next economic Tsunami and the bankrupt of several banks and Governments!
African Governments must be aware and cognizant of the current events to prepare themselves for the backlash of Western Banks improprieties. Western Banks will never admit what is happening now and how long these banks are going to hold on before they announce imminent bankruptcy. Of course with this announcement civil unrest will occur so African countries may be faced with riots; the ultimate socio-economic consequence. It will be naïve for these Developing countries to still believe in a Santa Clause Economy.
Developing countries' banks need to adopt a conservative moderate approach in their banking practices. Since their independence developing countries' banking practices seldom change to accommodate their countries' specific interests. To the developed world their banks are just depository banks, collecting funds for Western Banks for a nominal fee (5/6%) per year then make these funds available for the Westerners Banks to manage. The same Western Banks trade on these funds on average of 24 hours daily with a basic profit of 1% per week or better. In one month it will be 4% and in the year 48% of the capital deposit, in exchange of 5% to 6% interest per year. Do we have to blame the Western Banks? I do not think so, but the developing countries need real leadership; a leadership that is comfortable and prepared to transact with developed countries on an even playing field. No longer can developing countries sit ideally by and accept the minimum contributions for their prolific involvement. These developing countries are needed by Western Banks so they should be compensated at fair market value.
Developing countries are moving in the right direction, they send their countrymen to Western Universities to learn varieties of subjects including economic practices to become leaders in their home countries. But far too often, these countrymen lack leadership characteristics and fall prey to their western counterparts. These leaders should trust their abilities and design a strategic plan of implementation that will take advantage of their natural resources and offer them to the world at a fair price based on prevailing the market value. This approach Dr. Amouzou maintains will be the only hope for these countries to become economic power they are poised to become. It is very sad that these developing countries continue to wait for assistance and aid in the form of grants and loans from westerners to develop their own budgets that will ultimately lead to their liberation. This means no aid or assistance to developing countries without high associated costs of capital. Westerns do not want developing countries to become liberated; this will prove to be costly for westerners in the long run. Right now they achieve a windfall from current practices.
Why does one government have to rely on another government to provide basic needs to its people? It seems some governments of developing countries accept or even downgrade their worth in the global economy. As such, they prove to be incapable to manage and to lead their population into economic prosperity. It is absurd for some of these autocrat leaders to run their countries upside down. The ruthless are re-elected in perpetuity because the country is vulnerable to penetration by individual power mongers.
The main issue and most viable point I wish to convey in this article is the need for developing countries to rid themselves of subjugation. They need to stop begging for help and help themselves; they have the talent and resources to self-fulfill their initiatives. Currently, they embarrass themselves and the entire country by lack of vision, leadership and overwhelming corruption. Developing countries have the resources; the population is very young and energetic. They do not need any financial assistance or economic aid. These countries need to rely on themselves, declare war on corruption, not a selective corruption war but they need to destabilize the opposition. A good government needs a good opposition to help balance the power structure and maintain a system of checks and balances where everybody is accountable for the wellbeing of its citizens.
Only in developing countries do you see several ONG'S, European & other African delegations that come, watch and recommend that the election was done in calm and peace! Do developing countries need other countries to mentor and consult them about electoral organizing? In some areas organizing an election sounds like civil war and hostile takeover where the incapable government has ruled the country with self-interest, nepotism and cronyism all at the expense of the general population bring misery to the people. If developing countries cannot organize these basics infrastructural necessities, then how can they lead with forward thinking vision? Ruling a country for ten years does not mean you are talented or you are perfect to serve the country's interest. If you try and fail, leave the post and let more capable individuals lead.
The current banking financial crisis is imminent and at the front door of developing countries. They must be conscious and steadfast in their economic approach to stability. This will bring dignity, respect, and self-sufficiency to their children, grand-children and great grandchildren and rid them of the perception of being a marginalized municipality in a marginalized country on a marginalized continent.
For more information from Dr. Amouzou please see his previous articles:
• The Economic Decline of the USA Empire: The Airplane without the Pilot
• "The Perspective on Global Economic and Financial Status for 2013 and its impact on the future of the global economy?"
• "Could the World and the European Financial Systems Survive This World War III Financial crisis or it is the end of the Western Civilizations?"
• "Corruption and Development in the Developing Countries"
• "The World Financial Honey Moon is over: Debt Crisis Continues to Wage War on Economy Policy"
• "European Central Bank's Outright Monetary Transactions (OMT): The Bazooka Approach"
Dr. Amouzou received his Master in Business, from the European Advanced Institute of Management, also a Certificate in Finance and Investment in Paris, France. He completed his Post Graduation work in Political Strategy, International Relation and Defense Strategies and earned his Ph.D. in International Finance.
Contribution to this article and the aforementioned series was made by Byron K. Belser. Mr. Belser assists Dr. Amouzou; he holds a Masters of Arts degree in Development Economics & a Law degree.
Raymond Bernhard West from West International Petroleum LLC & Fundacion Paraiso Sin Fronteras
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