US itself is self sustaining – it sources 60% of supplies locally (which is HUGE compared to what it was).

Other countries that are developing and rely on exports to the US will crumble. UNLESS they find new markets. China found new markets during the Asian crisis and Australia managed to get away from it because it was pushed by local demand – but I wouldnt be relying on local demand if I was in China.

But then if those countries do get effected severely, the rest of the world will follow – BUT not as severely. Economists will start foreseeing the overall economic performance and the countries that are next on the list will start applying fiscal and monetary policies that will cushion this.

For example: US crumbles, takes down China. China stops exporting heavily to the US, and so it ceases its demand for coal from Australia. By that time, Australian economists would have tightened fiscal policy (budget) and would cushion the fall by providing transfer payments. Countries without these types of luxuries are unlikely to have the cushioning.

Also keep in mind that Russia’s exports are spread all through the world and a recession just in the US wouldnt impact that economy as hard unless it hit the EU, which it shouldnt because the EU has trade protection from the ground up.

First, you are witnessing the total collapse of the global financial system because all these banks sold each other investments that have crashed in value with the housing market. Unfortunately, they were greedy about it and this is a global market so the scope is basically total. Every major financial institution in the world is bankrupt. Next to fail will be Citibank the largest bank in the world and then American Express. That will be enough to trigger a global collapse of the US dollar as other countries dump their dollar reserves. All this is unavoidable and the current actions by the government are only buying time.

As for the bailout, here’s what they aren’t telling you on the evening news…

You keep hearing the number $700 billion, but since the collapse of Bear Sterns the administration has added over $2 trillion dollars to the US taxpayers bill. There are 138 million taxpayers in the US. This equals $15,000.00 for every taxpayer in America. If you are a two income family you just got a $30,000.00 tax bill.

This money has all gone into the pockets of the people who made a housing slump into an international crisis through highly speculative profiteering. For all this money you just spent though, the root cause of the problem – mortgage defaults and falling home prices in the US has not been solved and in fact continues to accelerate.

The grand total of at-risk mortgages in the US is 10% of the $12.1 trillion mortgage market, or $1.2 trillion. This problem could be solved by buying every single at-risk mortgage outright for less than has been given to the Wall Street bankers already, but that would mean bailing out average citizens instead of crooked and incompetent bankers.

The FDIC that insures your savings account is broke. They currently insure about $6.7 trillion in bank deposits but they only have about $40 billion in cash. If the FDIC had to cover all deposits today the payout would be six tenths of a penny on the dollar. The next big bank failure will wipe out this fund completely, and remember – the housing crisis is still accelerating.

The bank considered next most likely to fail is Citibank, the largest financial institution in the world with about $2.7 trillion in assets. Just like AIG, they will be considered too large to fail so you can expect to pick up the tab for this as well. Following Citibank most experts consider American Express the next casualty.

If you add the $2 trillion already spent with the FDIC and Citibank tabs and you are a two income household your tax bill for this will be $165,000.00.

The effect of taking an already mind boggling and economy crushing $9 trillion debt (US debt prior to crash) and tripling it will be hyper-inflation. When you dilute an existing supply of money what you have is worth less. When your money is worth less, that’s inflation. In the last eight years the highest inflation rate the US has seen is 5.6%. These actions could result in an inflation rate of 100% or even 1000% according to some economists. The administration is in the process of using your tax dollars to finance the total destruction of your lifestyle. And they are giving this money to the very people that cause the problem by their excessive profiteering.

You are paying interest on all of this money to the Federal Reserve just to add insult to injury. The interest payments on the national debt were $406 billion in 2006. NASA’s budget for that same year was $15 billion. Your share of interest payments to the Federal Reserve for printing your own money which they are stealing from you in order to destroy your lifestyle if you are a two income family will be over $17,000.00 every single year.

The scariest part is the administration’s use of this crisis to usurp the constitution. The bill currently being pushed through congress would give one man god-like control over everything in the US economy with specific provisions included to deny any oversight or review, by either Congress or the President. Henry Paulson could seize your bank and your bank accounts, seize the property your house is on and charge your rent for it, or use your tax money to buy anything he wants even international corporations – and nobody could do or say anything about it.

Section 8 of the proposed legislation says it all:

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

If you were really crafting legislation to save the country in a time of emergency would you specifically prohibit oversight? Isn’t lack of oversight of these very same guys what got us into this mess? Shouldn’t there be EXTRA oversight? Who’s best interest do they have in mind?

It helps if you don’t think of America as a single country, but think of it as one fourth of the world. America going into depression will have similar effect as Europe going into depression.

The banks are asking the taxpayers for 700 billion dollar to bail them out so that no more banks fail.