Wednesday, February 19, 2014

Smoke and Mirrors (part 7) -Shadow Lenders & the Economy

"The retreat of the shadow lenders has created a credit freeze globally; and when credit shrinks, the money supply shrinks with it. That means there is insufficient money to buy goods, so workers get laid off and factories get shut down, perpetuating a vicious spiral of economic collapse and depression. To reverse that cycle, credit needs to be restored; and when the banks can’t do it, the Fed needs to step in and start 'monetizing' debt' ". 

John Maynard Keynes, “if you owe your bank a thousand dollars and cannot repay it, you have a problem; but if you owe the bank 10 million dollars and cannot repay it, the bank has a problem”.  The super-rich know this principal well; At times, they leverage their risk by betting that the government or other big investors will have to step in and bail them out if the risk goes bad because the investment is so big.  There is little to suggest that these large financial risks do much to help the poor. Indeed, when they go belly up, wealthy investors are often bailed out (even while losing some of their money), whereas the masses of the people are struck with a sudden downturn in the economy an loss of jobs and income.  It is but a short step from legitimate, although complex, hedge funds to outright schemes of fraud designed to take advantage of those new to the speculative temptations of capitalism.  When governments become corrupt, this same principle of taking huge risks with the money of unsuspecting investors can turn into pyramid schemes, such as emerged in the mafia-ridden countries of Albania in the late 1990's.  Sometimes called “Ponzi” schemes, one of these investment opportunities, approved by the government, promised investors 20-50% return on their money in a “fund” in six months with absolutely nothing behind it.  The managers pocketed some of the money from new investors and paid back the rest as “high interest rates” to old investors.  This worked fine until there were no more new investors.  Then the house of cards fell down, and thousands of people in Albania lost their lifetime savings.  (Steger, Manfred B.  "Globaliztion".  Oxford.  U.K. 2003)

The RICH GET RICHER because of their TAX BREAKS and the fact that when they lose money they get BAILED OUT.  The Capitalistic System is not self regulated but regulated by a plutocracy.  That's why the RICH GET RICHER and the POOR GET POORER. Not because of hard work, talent, or luck. That only plays a small part in it.  Get real!!  Individualism plays such a small part in your role in society. We don't all start at the same position as everyone else.  We're not all created equal like the way society portrays itself through their doctrines in our early years of our schooling.  We can make as much as we want and get as far as we can in life until the NEXT ENGINEERED SOCIAL CRISIS IS TRIGGERED.  THEN WE'RE ALL CAUGHT INSIDE OF IT AND THAT'S WHEN THE MASSES ARE ACTUALLY EQUAL. Because there's no way for the masses to escape an engineered social crisis that starts from the TOP DOWN.

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