Sunday, January 2, 2011
Capital at the pinnacle
Meanwhile, in Europe, bondholders(that is to say, the ultrarich) are executing a play to expropriate the pension funds of the people, with the collusion of central bankers, working from the periphery to the centre, from Greece to Ireland to Portugal, Spain, and then Italy, and England, France, and even Germany itself. If that succeeds, there remain even bigger fish to fry, up to the level of the US itself. Merchant banks give self-interested advice to all parties, without a whisper about conflicts of interests, and then take bets on inside information. Any person, corporation, or government who takes the advice of - and hence opens their books to - Goldman Sachs is in such a delusional state as to be approaching insanity.
All have believed their own propaganda and now are exposed to be picked off, one by one. A big player can effectively corrall the hysterical sheep of the market into supporting their short-selling schemes, and amplifying their profits, provided they choose their moment - a moment of crisis. A long period of boom underpinned by forced inflows of superannuation seduced the speculating public, and blinded them to the risk. Public policy(and not just in Ireland) contrived the property and asset bubble , which ate all the benefits of the historic return to low interest rates in the mid-90's, essentially imposing massive bank rents on economic activity, while growth continues. The so-called 'financial services industry', in an age of automated financial systems has ballooned to close to a fifth of the western economy.
And eventually, growth falters, bust follows. The contradictions between the member economies of the Euro zone has simply added arbitraging to the possibilities, making it easy, if you have the money, to squeeze one state treasury after another, eventually(of course), agreeing to buy their bond, but only at the price of beggaring their peoples(and having also agreed to defer all carbon mitigation to the post-2020 era, apart from creative accounting - see this page )
Posted by liberty at 7:14 PM