Tag Archives: Addiction

Why the Coming Global Collapse . . . Again!

armeggeddon photo

With a collapsing Chinese Stock Market and New York suddenly throwing a wobbly yesterday, in a piece a little longer than usual, I offer my observations on how greedy banks, aided and abetted by inept politicians, are causing another global collapse they will then watch from their ivory towers, as we flounder in the sea of financial devastation they have created. JTC

After 2008 interest rates were reduced to nearly zero “To get money circulating and grow the economy again” we were told. What sheer unadulterated rubbish . . . Banks earn their living by charging interest!

Low interest means they won’t lend to you and me, or small and medium businesses, which could have kick started the economy, because there’s no money in it (except for our credit cards)! This has resulted in banks seeking alternative avenues of profit that are causing the growing gap between the rich and the poor, as well as destabilising the global financial system?

Currently they are making money from vast amounts of cheap loans, printed out of thin air*, which they lend to mega corporations. These then use it to buy back their own shares or other companies, keeping their share price up and thereby enabling them to pay huge bonuses at a time when their profits are going down!

This creates a financial ‘bubble’, because the value of the shares is greater than the actual value of the company. As most of the global corporations are playing this game we now have a bubble the size of this Planet . . . and we know bubbles burst!

So what else are they doing? Loans that are risky demand higher interest rates and so ‘sub-prime’ lending is good. Lending to countries is even better because the loans are vast. But we already know these loans can’t be repaid, as Greece and a growing number of other countries are now declaring and the IMF is admitting to.

“Wait a minute” I hear you say, “Won’t the banks go bust, as they did in 2008”? I’ll return to this in a minute.

They have also focussed on financial gambling, (sorry Derivatives trading!) rather than traditional banking. Derivatives are just pieces of paper and lack any transparency as to their content, so you have no idea of what you are buying or selling. With the sub-prime mortgages the banks knew they were making loans that would quickly go bad and so they parcelled them together with good loans and sold this toxic combination off in bundles to each other.

Of course the bad loans in each bundle went bust, immediately destroying the declared value of the whole bundle (Derivative) and the bubble between their supposed value and actual worth burst, creating distrust and crashing the markets overnight.

It’s like a horse race in which, unknown by you, several of the horses have been doped. When the news gets out you raid the housekeeping to make up your losses and then stay away . . . for a while. Gambling is addictive and so eventually you return to the track and start betting again.

This is exactly what the banks did after 2008, with the collusion of politicians. And the bubble will collapse again but this time it will be devastating. To give you some idea of the extent of the problem, last year’s revenue in the world’s gambling capital, Las Vegas, was $6.4 billion. The last time I looked the value placed upon global derivatives, including currency, interest rate and sovereign debt gambling, was $724 TRILLION!

The 2013 Credit Suisse Global Wealth Report stated that global wealth had then reached a new all-time high of $241 trillion, confirming that another financial bubble of elephantine proportions has now been created.

Real wealth comes from making and selling tangible items that cannot evaporate overnight. Paper wealth, as sub-prime mortgage derivatives and the collapse of Lehman Bros demonstrated, not only disappear overnight through loss of trust but bring the whole world crashing down with them.

So why are the banks playing such a dangerous game again? Easy. They can’t lose again because they have a new source of ‘housekeeping’ money!

When the bad debts, like the Greek bubble finally bursts (because the value of their debt is way in excess of their worth as a country), the domino effect upon other similar situations and countries will crash the banks. Hence the unprecedented brutal pressure on Greece by Brussels and the Troika to keep playing, because they know what is at risk! When it happens, however, they will simply close their doors and lock in all of the cash they are holding.

The wages you have earned, or the money you have saved, or the pension you have contributed to will become an ‘asset’ of the bank into which they have been paid. As an ‘asset’ the bank can then use it to cover its indebtedness. Not only will they lock the doors and switch off the ATM’s but hold a piece of paper at the window, from our politicians, telling us that what they are doing is quite legal and to go away and annoy someone else.

A directive has come out from the European Commission that all EU countries must comply with so-called bank and resolution recovery directives (BRRD), mandating that all the money banks are holding become part of their capital structure and no longer money belonging to savers!

“But that’s theft” I hear you say. NO . . . it’s legalised theft, like the taxpayer bail-out, because it comes with the full collusion of our politicians!

To add insult to injury in the UK, the Financial Services Compensation Scheme is reducing the amount of compensation from £85,000 to £75,000 when a bank goes bust, instead of increasing it. (Does Osborne know something, do you think?!)

Between them the banks and politicians screwed us as ‘taxpayers’ last time and will screw us again this time as ‘account holders and savers’ with a bail-in instead of a bail-out!

As Mario Draghi, President of the ECB, stated in a press meeting last month, “The sub-prime crisis is mostly due to lack of supervision”. . . and this type of ineptness is exactly what the politicians do so very well in their support of a wholly distorted financial system.

As a global Society it is taking us nowhere. We need to exercise our growing power in this internet age and put people into power who have the same mind-set as Alex Tsipras. He is not frightened by his adversaries and his type of tenacity and integrity will end this corrupt form of Capitalism, turning us away from an Economy and back into a Society again . . . if we are willing to stand up and be counted.


Until the next time

*P.S. For a perfect description of how money is printed out of thin air I can do no better than refer you to this piece by my friend Sky Wanderer @glopol_analysis:  https://globalpoliticalanalysis.wordpress.com/2014/06/18/the-short-story-of-how-we-are-kept-in-odious-debt-deficit-crisis-and-austerity/?blogsub=confirming#blog_subscription-3


Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes

The Horror of TTIP

Caution: This piece contains explicit imagery.

Many years ago I watched an interview with a psychiatrist who counselled the rich and famous in Hollywood. Treating addiction was his speciality and he stated how important and difficult it is for the addict to recognise they have a problem, the very first step to recovery. In his own case he became aware he had a serious problem when he came out of a drug induced coma one morning lying face down in the gutter with a dog urinating on his face!

I have alluded before to the addictive qualities of ‘profit’ within Capitalism http://tinyurl.com/khy6nr8 . I see the Transatlantic Trade and Investment Partnership (TTIP) as a serious symptom of this quality, with its complete disregard for people, democracy and the Law of the Land in the attainment of its profit goals/fix.

Corporations have been allowed to become global whilst governments, whose job it is to restrain them, remain national and increasingly ineffective. Hence the now threatening possibility for corporations to sue governments if legislation they introduce could have an adverse effect upon future profits.

Of greater concern is a recently leaked EU document showing quite clearly that corporations will become more directly involved in policy making through a new institution, the Regulatory Cooperation Body (RCB). Its purpose is to coordinate the process of ‘regulatory coherence’ between the US and the EU, effectively side-lining, if not neutering, the public and civil organisations. (Source: Centre for Research on Globalization – http://tinyurl.com/m9vxl6t)

Aided by the RCB, this abusive agreement would work against all food, health and safety legislation designed to safeguard us, as the costs would affect profits. It can also be easily seen that it would allow the continuing devastation of our Planet. Be in no doubt about the seriousness of this agreement upon us, as a Society and a country.

Let’s just look at Fracking and the US experience in only a few short years. It tells of increasing earthquakes and growing health problems attributable to the use of chemicals, the type of which nobody is prepared to disclose and of particular danger to those living near the ever mushrooming Fracking sites. As a final insult, residents are left to clear up the considerable mess out of public funds, when the well has been exhausted, as there is no profit to be had from this part of the process.

Now the scary bit! If government in the UK suddenly saw the light from the US experience and reversed all decisions made so far to allow this odious process, with TTIP in force they would be sued. Doesn’t sound that sinister until you realise that this is an infant industry and if a quarter of what Cameron tells us is true, there are obscene amounts of money to be made here. After all, we are told that Fracking would resolve all of our current financial problems and see our balance of payments in good order for many decades to come!

THAT is a lot of money which, under the terms of TTIP, corporations would then be able to seek recompense for, if we reneged on current agreements. It doesn’t take a rocket scientist to see that the elephantine sums involved would bankrupt this country once and for all!

We are entering an Orwellian world where Big Brother will cease to regulate any corporate activity and presumably be unable to seek taxes from these monoliths because it would have repercussions upon their bottom line!

Am I being ridiculous . . . could things really get this bad? WHO KNOWS! Perhaps this is the reason it has been shrouded in so much secrecy for so many years. And how could we find out, because we don’t trust what we are told by those in authority?

Given the growing abuse of the 99% by the 1%, of which TTIP is an excess beyond belief, I see the hallmarks of addiction in its latter stages, as the demands for the unchecked profit growth ‘fix’  become more excessive and menacing with a corporate world in denial at the destructive repercussions of its actions. (Another banking collapse is already on the cards we are arrogantly told and with monotonous regularity!)

We have ravaged our Planet to a point where one of our major sources of food, the oceans, is now becoming toxic and GM crops are in question. The real nature of our problem is that we are the only species to poison its own food because of troubled addictive reasoning and belief about the profit fix!

I find myself looking, with increasing alarm, at the melting polar caps and considering the metaphor that perhaps our Planet is now readying itself to urinate on our collective faces. Sadly by then, I fear, it will be too late for any form of remedial treatment for our condition.

Until the next time


Thinking from his Book: Global Magna Carta. Returning Power to The 99% . . . If They Want It! By J T Coombes