Pyongyang, October 19 (KCNA) -- The market economy of capitalism is now on the point of total bankruptcy, embroiled in a new financial panic by protracted economic crisis.

There happened an unprecedented situation in which stock fell hard all of a sudden at securities markets in various parts of the world.

At a stock market in New York on September 22 the Dow Jones dumped 3.5 percent, the lowest annual record, while the Nasdaq dropped 3.3 percent.

The decreasing rate of stock was more serious at securities markets in European countries. To say nothing of South European countries including Greece and Italy, Nordic countries, which were said to be in stable financial state relatively, met a slump in stocks.

This situation resulted in decline of 2 percent on average at Asian securities markets.

Consequently, the international financial markets were confused with selling not only stock but all things valued with money.

It was also reported that many people have drawn their deposit from the greatest bank in France.

Competitive intervention in monetary markets and control of exchange rate by Western countries caused fluctuations in price of major currencies including U.S. dollar, euro and yen, creating a new global crisis called "financial war".

The situation was attributable to the unprecedented state debts in the U.S. and Europe by the serious financial economic crisis.

In recent years the U.S. has poured astronomical relief funds on big businesses on the point of bankruptcy due to the global financial economic panic. The resource was the money it borrowed from other countries with the issue of national bonds. It was the U.S. calculation that U.S. dollar, main lever for international financial settlements, can be issued anytime to repay state debts since this currency belongs to it.

In actuality the U.S. found its way out of crisis in raising the ceiling of state debt though it amounted to more than 14 trillion U.S. dollars.

In this regard Greenspan, ex-chairman of Board of Governors of Federal Reserve System, in his recent interview with NBC, claimed that the U.S. bonds are a kind of safe investment and the U.S. can repay all its debts because there is no probability for it to go against its promise for repayment if it continues issuing paper money.

In reaction to this arrogant and irresponsible behavior of the U.S. confusing the international financial order instead of taking effective measures for settlement of its state debt, Standard and Poor's, an international credit rating body, dropped the U.S. credit grade for the first time in history in early August this year.

As a result, stocks fell hard at the global financial markets, causing such serious upheaval as rise and fall in quotations of major currencies.

The debt crisis in Europe is one of the main factors that caused a new global financial panic.

It is Greece that was hit hardest by spread into Europe of the financial crisis erupted in the U.S. a few years ago. Greece was borrowing much money from other countries' banks by means of issuing national bonds as its economy grew in scope. These big banks in Europe found themselves on the point of bankruptcy because of failure to withdraw their money invested on the U.S. real estate speculative market. After all, Greece was pressed to repay tremendous debts and eventually could not but declare default. The similar crisis can be found in other Eurozone countries including Italy, Ireland and Portugal.

According to data, European banks, which bought national bonds issued by Eurozone countries suffering from the debt crisis, may sustain losses of 300 billion Euros in maximum.

The finance ministers and central bank governors of the Group of Seven (G7) industrialized nations met at the Marseille of France on September 9 and 10. But, this meeting failed to take concrete measure for defusing the European debt crisis, further darkening the prospect of global economy.

Just prior to the meeting, the International Monetary Fund noted that the state debts of seven countries in the West reach upward of 80 percent of their gross national product. This serious debt crisis may bring about the stagnation of global economy again, it warned.

As regards the gloomy monetary situation in Western countries the Organization for Economic Cooperation and Development predicted that the capitalist economy would not escape from the stagnation not only in 2011 but in 2012.

This is little short of declaration the U.S. claim that the economic stagnation ended in June 2009 is no more than a lie.

The facts show that the capitalist market economy is steadily falling down into the maw of total bankruptcy due to its anarchy and spontaneity.