Germany’s president and former IMF head Hoerst Koehler has added his voice to the rising condemnation of the financial sector’s role in the global economic downturn. Referring to finance markets as a “monster that has to be put back in the closet,” Koehler went on to criticize the “irresponsibility” of bankers who, despite the horrific effects of that irresponsibility, receive “bizarrely high salaries.” Originally interviewed by the tabloid Stern newspaper, the German business paper Handelsblatt also noted that Koehler must declare his candidacy soon for a second term. Germany has seen a wave of strikes in this calendar year, and labor militancy in Germany may well have contributed to the recent intransigence of the European Central Bank where interest rate cuts are concerned (in other words, the ECB, fearing that German workers in particular are beginning to demand wages that offset inflation, is more reluctant to lower interest rates in the face of economic downturn, unlike the Fed, which doesn’t seem to fear US workers’ wage demands as much). Too bad Koehler wasn’t running for a spot on the European Central Bank’s monetary committee….
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Perhaps what Mr. Koehler refers to is the fact that many banks, especially US banks use derivatives for leveraging markets creating speculative positions that inflate a commodoties real value.Of course this is something, the oil companies have become adept at as well, among others. The rational and basis for inflating oil prices has not changed dramatically in the last several months. THerefore the driving engine for the outragious price of fuel and particularly gasoline is the derivatives market.Something Mr. Bush and cronies are well aware of and blame market conditions. AVARICE is like cancer its growth leaves the victims helpless.