This is an interesting perspective on the situation. It’s not anywhere nearly as far-fetched as it may seem, as I recall that years ago, Alan Greenspan smugly explained how it was European investors who would be sent the bill for the irrational exuberance of the American economy:
What has emerged are the outlines of two opposite approaches to the unfolding crisis. The Paulson plan is now clearly part of a project to create three colossal global financial giants – Citigroup, JP MorganChase and, of course, Paulson’s own Goldman Sachs, now conveniently enough a bank. Having successfully used fear and panic to wrestle a $700 billion bailout from the US taxpayers, now the big three will try to use their unprecedented muscle to ravage European banks in the years ahead. So long as the world’s largest financial credit rating agencies – Moody’s and Standard & Poors – are untouched by the scandals and Congressional hearings, the reorganized US financial power of Goldman Sachs, Citigroup and JP Morgan Chase could potentially regroup and advance their global agenda over the coming several years, walking over the ashes of a bankrupt American economy made bankrupt by their follies.
By agreeing on a strategy of nationalizing what EU finance ministers deem are ‘EU banks too systemically strategic to fail,’ while guaranteeing bank deposits, the largest EU governments, Germany and the UK, in contrast to the US, have opted for what will in the longer run allow European banking giants to withstand the anticipated financial attacks from the likes of Goldman or Citigroup.
The dramatic selloff of stocks across European bourses and across Asia is in reality a secondary and far less critical issue. According to market reports, the selloff is being driven mainly by US hedge funds desperate to raise cash as they realize the US economy is going into economic depression, that they are exposed and that the Paulson Plan does nothing to address that.
A functioning solvent banking and interbank system is far the more strategic issue…. Certain more conservative EU hands are not about to buy the remedy being offered by Washington.
What those who correctly subscribe to the conspiracy theory of history often tend to forget is that there is no one great overarching conspiracy of bad men. Reading Roman, Byzantine, and Greek history quickly teaches one that there are multiple conspiracies of men who rapidly shift from one conspiratorial faction into another, always trying to maximize their own individual benefit at all times. Paulson’s long-term objective is very different than Bush’s, let alone Obama’s or the average Wall Street cheerleader’s. And none of these have the American public’s interest in mind, unfortunately, the American public has neither the capacity nor the interest in even beginning to grasp these tectonic struggles taking place beneath the foundations of their society.
Now that Iceland has fallen, it’s pretty clear that neither Europe nor Japan are going to be in any mood to tolerate Mr. Paulson’s master plan to salvage American financial dominance.