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Wednesday's market rise is not a good sign, but another reflex of the instability stalking the financial world.  As the credit crisis grows and sovereign bonds sky rocket and the Eurozone teeters on the verge of collapse, investors are showing us what an unregulated market can achieve.   The international financial system is doing what it does best, free markets mean every man for himself capitalism.  As the stampede gathers force, investors seize on the weakest element in any system and press it to maximize short term profit.  Tony Barber's article in Wednesday's FT (Calamity contingencies) indicates that everyone is preparing for the eventual collapse of the Eurozone.  The massive financial disturbance that will create will produce bankruptcies, failures and liquidity crisis.
    We are viewing the rush down the escalator to economic chaos.  Instead of a cooperative engagement to defuse the crisis, investors cannot help themselves given the ideology of current market capitalism. Since China and Japan have insulated themselves from foreign capital manipulation (the Japanese own almost all their government debt and China controls theirs) the collapse of the West will likely break on their shores.  
   As the USA becomes ever more chaotic in coming months, recent US saber rattling will increasingly appear as a quaint anachronism, as China's neighbors will come to huddle around her stability.  America has only now awakened to the final stages of World War Three, but unlike the new Cold Warriors like Robert Kaplan (FT The US navy fostered globalization...), Americans must recognize that we waged this war largely against ourselves.  We exported jobs, bought foreign goods on credit and sold our debt abroad.  We have truly met the enemy and they are us.  Asia, led by China will be lucky to contain the ruin at their gates.  They must fear the aftermath of our decline, for a disordered, bankrupt West armed with nuclear weapons will be  potentially dangerous.
   Only a judiciary as active as that of Judge Rakoff (on the SEC - Citibank agreement) can fend off disaster but only on a massive scale of global reach as the counterpartly agreements tied to bonds and derivatives are leading us down an inevitable crevasse of monumental proportions.  Like the treaties of 1914 one bullet sent a world afire, today contract after contract leads to the undoing of the whole world.

Niccolo Caldararo, Ph.D.
Dept. of Anthropology
San Francisco State University

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