Commendatori's Blog

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High Finance and Black Holes

Posted by commendatori on February 5, 2009

By David Bentata

Me? What do i know about high finance? Not much, to be sure, but how much does one need to know to recognize the incredible black hole that “high finance” now finds itself in? The strange thing is that those who were supposed to know, those High Priests of the financial world have proved at best, to even know less….. at worst , they knew but dared to speak. That did not stop the Top Cats from becoming Fat despite knowing that the bubble was about to burst!

In plain, simple language, banks over the world knew what was going on. All banks, finance companies, building societies and loan companies were falling over themselves to lend people money.

Buy a new car!

Get a mortgage for a new house …. Or even a second house!!

Get a loan to get on holiday!

Buy a yacht!

Whatever you have always desired you can have it with one of our Magic Carpet Loans!

All the adverts, not just of these institutions, but all consumer oriented producers, were inviting us to get into debt so we could buy their “unnecessary necessities” on the never-never. And like children at the Credit Candy Store, we fell for it.

True, our greed WAS the grease that made this Money Monster slide, but were we not relying on the Financial Gurus to have sussed out the repayment details correctly for us? And yet, behind our greed was another factor, their greed!

The consumer society that was to drive all countries to spread wealth to us all soon became just a debt machine where one bank sold its debt to another and that one to yet a third and fourth and so on. Each entity was holding huge book assets that in reality were not much more than fantasy book-entries. With such imaginative figures they made everyone believe they were all profitable organizations.

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But were are all the millions, billions, trillions and zillions of after-tax profits that they were all declaring to their shareholders and proudly displaying in their balance sheets? Where have they disappeared to now that this money is sorely needed?

“Oops, sorry guys but we’ve paid our president and vice presidents, our managing directors and executive officers …. the coffers are empty”

Not just empty, but owing so much that the government of every country in the world are rushing to plug the holes rapidly sinking ship of fools before the Consumer Society & its financiers disappear into a black hole of devalued Dollars, Pounds, Euros and Yens.

Now just a minute…

What got us into all this mess was the over-marketing of excessive credit. What got us into this mess was the loaning machine with financial institutions built and accelerated into overdrive. What got the world into this mess was precisely that, CREDIT. And such indiscriminate credit tricked society and each and every one of us into accepting life-long debt as the modern way of life. Now that it is blatantly obvious that these institutions have squandered these moneys, inflated their balance sheet, hoodwinked the stock market and … in short… tricked every one including themselves… now that we all know this, our governments are bailing out the very culprits by giving them freshly printed money so they can… wait for it .. give us all more credits and loans!

Why? Because then the ordinary man in the street will have to work harder to make profits for the very institutions that squandered the money they made from us in the first place! When they were making huge profits, they shared these exclusively among themselves. Mr and Mrs Man-In-The-Street did not even get a whiff of that. But now that they are bankrupt the Tax Money or Mr and Mrs Man-In-The-Street is going to be used … is being used… to keep the very same institutions – in most cases with the very same executive officers – afloat. After getting out tax money at just a nominal interest rate, they will loan it to us at a much higher rate and make us work harder… to pay back what we already given to our governments to keep for our society’s infrastructure. So we end up losing, not once, but twice.

And this is High Finance?

Personaly, I fell that governments should and must step in, but to help the people that are caught in this web of loans and credit directly, not through the proved inefficient institutions that created the mess in the first place.

As an example, if a person is incapable continuing mortgage payments on his first home (not his luxury second home) then the government should buy the remaining debt from the bank and allow the person to live in his home as a paying tenant. The rent would be an amount well below the mortgage repayment he can no longer meet so as to give him the financial respite needed to get back on his feet again. This is DIRECT HELP to those that need it.

True, this does lead to nationalisation but would be a “beneficial nationalisation”, not an enforced one. In any case, is that any worse than the tragic situation we are facing now? Is that any worse than supporting the very institutions that have caused the huge and world-wide financial collapse?

But as I said in the beginning … what do I know of high finance? All I know is that when there are debts to pay, giving further loans only worsens a bad situation. Giving such loans through those at so grossly mismanaged matters the first tome is utter stupidity.

Blog Author Comment

I believe the fundamental problem with the financial crisis, lies in the creation of money itself. I invite any and all reader to find about the system called the “Fractional Reserve”. This system permits a bank to lend up to 10 times the amount of a deposit, or can lend ten times the amount of reserves it holds. On a grand scale it is easy to see it is a Ponzi scheme. This unsustainable system, has been the real “hidden hand” permitting crisis, and make Fat-Cats, even fatter.

Please for more information watch the documentary called ” Money Masters – How Int. Bankers Control America” Money Masters – How Int. Bankers Control America

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