WHO PROFITS FROM THE CRASH?
[This blog from August 14, 2007 is translated from the German on the World Wide Web http://alles-schallundrauch.blogspot.com/2007/08/wer-profitiert-vom-crash.html
The crash of the finance market represents an assets transfer from the poor and the middle class to the ruling elite. More than an assets regrouping occurs. This is also not merely the result of incapability and inadequate foresight. Quite the contrary! The fall was well planned and consciously executed. A criminal corruption on the highest planes of the economic and political system is at the heart of the assets transfer. In retrospect, we can look back to the “savings and loan” debacle that in its time was the greatest theft in the history of the world. Today the amount of the assets stolen from the American people and the whole world is incredible. It makes the S & L scandal look like the simple breaking of a piggy bank.
In the press, we hear continuously of banks and hedge funds that endured losses from sub prime mortgages. Astonishingly these reports assume the losses resulted from a “natural” market downswing or a narrowing credit cycle. The inconceivable profits that were earlier generated and who made them are not reported. The beneficiaries were the big banks operating worldwide with their derivative creations outside all control and supervision and their managers who made obscene profits in the last years. Even the most enlightened financial analysts describe this financial “coup d’etat” as an unintended consequence of “market forces.”
The spectacular mortgage bubble was actually intended, planned and constructed by the leaders of the financial system. They created “leverage” from a “genuine” dollar, 100 virtual dollars and thus a complete house of cards that had nothing to do with reality and now collapse. When the Internet- and Telecom bubble burst and Enron went bankrupt, people all over the world lost their jobs and their life savings. Nevertheless the economy remained “brisk” since the artificially created mortgage bubble financed the “western” lifestyle based on ever-greater debts. Thus America could continue consuming with the rest of the world producing for America.
Financial analysts and the media want to persuade us the Dow Jones Index had hit an all-time high and follows a “necessary” correction. The value of the Dow is actually considerably lower than in the year 2000 when measured by real values. The dollar has lost much value since 2000 and a huge inflation has occurred. Although the Dow is nominally higher, all the investors who invested their assets in Dow stocks are actually much poorer now than in 2000. When the Dow is converted in euros, 30% of its value has been lost in the last 7 years. If one converts it in milk, the Dow buys 35% less milk. It buys 40% less wheat and corn, 50% less gold, 55% less silver, 70% less oil, 80% less copper and 90% less uranium. The list could go on endlessly.
When the Dow Jones Index is compared with the price of some article today over against its price in 2000 whether real estate, cars, consumer goods, education or insurance, then a loss is clearly manifest. When Wall Street claims a growth of over 15% in the 7 years to 14,000 points, one must not fall in the trap[ and belief it. This is like a magician diverting us with a movement so what he does with the other hand is not noticed.
Over all the years, the value of money and assets invested in shares fell considerably. People have become much poorer. The money migrated from the common people on the street into the pockets of the elite. All the savings of the working class for provisions and pensions invested in funds, shares and other securities were regularly plundered by the vultures. We all have been defrauded.
The United States skids into an economic collapse and drags the whole world to the abyss. The train consisting of fraud, theft and willful deceit by the national and global financial system is derailed. Many think an accident happened caused by incompetence of the institutions and stupid consumers. This financial disaster in personal and state over-indebtedness was consciously brought about by the financial system to realize incredible profits. The middle class is dying out because the banks bled them white. For them, debts are “obscenely profitable.”
With cheap money, people were enticed to a debt nightmare with the prospect that the endlessly rising real estate market would save them if necessary. Now where the market collapses and they must sell off their assets dirt cheap, they are left with nothing. This trap was laid for them, calculated exactly and cooked up diabolically. The people were encouraged to make debts although a repayment was clearly impossible. The taxpayer should now iron this out through rescue operations. In a super net of deceit, the trap is built and the people grope and eke out an idiotic living. At the end, the people pay the bill.
All this is not incompetence. It is a putsch of the financial elite based on corruption and greed that are the main reasons for the financial disaster. Every few decades, the real owners of the world arrange an economic crisis to steal the assets of the people. This happened in the 1920s and 1930s and is regularly repeated. The rich emerged from these crises even richer. Now this is happening again. The rich know the day of reckoning will come but they want to be far away with their bellies full when it breaks.
As the perpetrators behind the savings and loan swindle profited on the way up and on the way down, predatory capitalists will win on both sides from the sub prime catastrophe. Long ago the largest investment banks secretly founded a consortium in which they created the LCDX Index to protect against the current market loss with the promise of a bundle of money if things go downhill. As a proverb says, the bank always wins!
The Federal Reserve Bank, the central bank of the US, neither belongs to the “nation” nor has any “reserves.” It is as little federal as the Federal Express. In this private institution, the shareholders are completely unknown. No one knows who owns the central bank of the US. It is an inscrutably complex group of big banks and private persons who really hold all the strings. Like most central banks of the world, it creates money out of thin air through the minimum reserve system that is covered by absolutely nothing.
Since the 1970s, the US has backed out of gold backing for the dollar. Since then, the dollar has been only worthless paper gaining its worth from a belief and an illusion. The whole thing is an air bubble, a gigantic fraud, since they are only numbers in a computer system. When a central bank pumps 1 billion in the money market, then some person is given a one and 9 zeros on the screen and the money is simply there like magic.
This is what happens with the money “lent” by a bank to its borrowers. Only lay persons think there is a heap of money in a vault somewhere that was filled by depositors and that this money is lent out. That is a naïve fairy tale. With a credit, a sum is simply assigned to an account of nothingness. The credit policy and security for credit produced the money. Since a credit actually generated the money, there would be no money any more if all the debts were paid back. This may not happen. Therefore the mountain of debts arises. The money for the interests must come from somewhere.
This creation of money from thin air with interests and compound interests only functions with a constantly expanding inflationary money supply system. The engineers of the “global casino” must invent constantly new, ever more absurd and more speculative working models to keep the roulette wheel rolling. We all know nothing can become endlessly greater. Some time or other this façade will not be supportive any longer and then the whole thing will collapse. We may now be in such a situation. The end of maximum expansion, the shipwreck of the empire of debts is underway.
The policy of the Federal Reserve Bank and the other central banks is to bring about crises to reshuffle assets to the elite. They have accomplished this. Nearly 4 million Americans have already lost their jobs through outsourcing abroad. The country has a debt mountain of $3 trillion and foreign investors hold $4.5 trillion in securities and assets. While the Fed carries out its economic strategy, the Bush administration deploys the military all over the world to wage a global war to conquer resources. These are two wheels on the same axle.
The goal is maintaining control over the global economic system seizing the remaining energy resources in Eurasia and the Middle East and integrating potential rivals in the US-led economic model, either through persuasion or through extortion led by the US Federal Reserve. Both parties of Congress confess the principle of the permanent US global hegemony. No difference exists. The world has to serve as a dumb slave for America. Basta (enough).
All the central banks of the world have injected the incredible sum of $325 billion into the financial system within a few days. All our money is now made available to rescue the swindlers and con men. With this financial injection, the head of the Federal Reserve Ben Bernanke steers the dollar to a hyper-inflation. In doing this, he meets halfway the supporters of Dick Cheney with their completely mad aggression even including a war with Iran in the illusion of thereby escaping the military defeats in Iraq and Afghanistan and the death agony of the dollar.
The manifest crisis will probably magnify all the deceit, corruption and self-service which most people will find incomprehensible. Day after day we will hear reports about concealed losses, false accounting, inflated assets, claims not on the balance sheets, valuation discrepancies, uncontrolled offshore branches, phantom profits, insider trading, plundering of firms right before bankruptcy by the owners and management to the disadvantage of employees, suppliers and taxpayers and so on.
The financial Armageddon can create a world of wars, chaos, lawlessness, hunger, thirst, homelessness, mass migrations and people with nothing left to lose who will do anything to survive. This situation with masses of troublemakers and immigrants will be an unacceptable threat to security and therefore necessitate the introduction of martial law with great numbers of people in prison camps. The people in the “first world” will be confronted with unusual things like legal, financial and security restrictions, entrance gates and jails.
The people who underrate the dangers in the future and do not take precautions will stand there without a penny. Then people will have to creative. Tangible assets like gold and other exchangeable objects will be very important. Skills will be sought that are useful for oneself and others and assure the future. In a word, the party is over. If you read these words, you are one of the few people who know what this means.