This is the great scam of international finance, especially for less established nations. We will loan you plenty of Euros, but we want it paid back in Dollars. This is can be devastating for developing nations. If they try to print their own currency foreign companies refuse it as payment.  No one will take it, it isn’t real. Its only real if they borrow it from someone else in a currency currently accepted. When they are unable to pay back their loans countries like Haiti are cut off from credit, “It must be right that a nation buried in rubble must not also be buried in debt.”  We will only bury nations in debt free of ruble. Its only logical, how will they pay off the loans if the country is buried in ruble?

Goldman seams to be rearing its head everywhere these days.  The bank also made new by suggesting that American investors need to be more “worldly.”  Which is euphemism for move your money over seas where the getting is good because there is no money to be made here in the U.S.

The “bank holding company” is also in the news haggling with AIG saying the insurer ows it more money on insured assetts that went south. AIG is claiming just the opposite that Goldman overstated its losses and that Goldman needs to pay back some of the money. While the two mega-finance corporations squabble over the easy government money. This year has not been spectacular for AIG, for Goldman however 2009 has been a year of record profits.

Re-capitalized by the government Goldman did what it does best in 2009, capitalize.  Since the other American premier investment houses Bear Stearns and Lehman either were absorbed or destroyed by the market, Goldman was the only game left in town willing to dabble in the scary stuff. Taking advantage of the slack market Goldman bought the risky mortgaged backed securities at low prices and turned record profits in 2009.

Yeah, Goldman Sachs raked in 13.4 billion this year.  Just for a point of refference, if Goldman Sachs was its own country it would push out Gana for the 100th spot on the list for GDP accross all nations.  Of course even though average total employee compensation at Goldman is $500,000 per year, the CEO is making headlines for only taking $9 million worth in stocks for bonus. This is after it earlier came to light that he was set to stash a hundred million this year. Poor guy. Blankfien will just have to get by. Hopefully he stashed some of his $68 million bonus  from 2007 for a rainy day. Or he could just have some of those guys who working with the Greeks to hide a hundred billion in derivatives… one hundred times more than what he made…

The saddest part of the whole situation is while Americans love to bash the corporate chieftains for their greed yet we are still completely enamored by them. From the industrial revolution onward the characterization of businessmen has gone back and forth between two different character types. The captain of industry, master of organization sent and ordained by the Almighty to make decision inferior creatures are incapable of.Of course the doppelganger is the  greedy capitalist pig willing to do whatever it takes to protect its profits. A significant shift occurred. In the past the U.S. economy was reliant on our industry to make stuff poeple buy. Since the 1970′s more and more profits have come increasingly from stock jobbing or financial speculation – in the  jargon of late.  More and more people have been making money not by making tangible goods but in the markets.  They have been making more and more money by betting on (or against) savings and loans, tech stocks, and mortgage schemes. Activities that  don’t end up making any useful things.

The result is that no longer is that what’s good for GM is whats good for America, its what’s good for Goldman that’s good for America (not exactly leisurely reading). GM hasn’t made a profit off an car in decades. They make money off the loan on the car.  Economic dependency on our financial services sector, which surely lends itself to political clout, is what got the laws separating banking activities and regulating risk wiped from the books. Now, businesses can contribute unlimited amounts of money to political campaigns. No doubt Goldman will have a bit more leverage over legislators than they gained with Blankfien’s hurricane defense of the low interest rate – double ended – speculative frenzy we call the housing bubble.  Such undeserved power might ensure the business community a deregulated climate for conjuring up the perfect storm.