simple econ explanation — with sources

it’s complicated by lots of deliberate misdirection and word games, but if one digs deeply enough the fraud perpetrated on the whole world by the banksters, and the resultant worldwide crisis can be explained in rather simple terms. (source material here: and here– follow the links: —especially read the speech jamie galbraith gave in germany recently! )

first, everyone but consumers knew what was going on: it was not discussed in polite company. loans were being given to people who couldn’t repay them–all over the world–from omaha to greece. bad debt was passed off on unsuspecting investors by insiders who knew what the deal was but also knew that investors had no idea what a “credit default swap” or a “collateralized debt obligation” really was or what kind of risk they were paying their good money for. and this whole system was based on bankers putting more money into play than they actually had (that’s the “fractional reserve” part). they called it by different names: leverage, mortgages, loans, revolving credit, “liar’s loans”, i don’t even know all the covert ways they have of saying “here; buy this with imaginary money and pay us back later with real money.” the banks can’t lose because they are using depositors “money” to make loans, demanding interest in return, and the federal government guarantees to pay in full if the bank’s depositors demand all their money. at this point, more money is owed to the banks than even exists! that’s right, read the “ponzi scheme” article linked to above, and follow some of the links…

so what’s a poor, underfunded central government to do. well, it’s called “quantitative easing.” they don’t exactly explain it this way: they talk about the central bank “buying bonds” and talk about whether the term of the bonds is longer or shorter as if that were the more important part of the transaction. you kinda have to know your way around a bit to ask, “where is the money coming from that you’re buying these bonds with?” ah! “we’re printing it at the mint.” “where did it come from?” “paper and ink” “is it backed up by anything? like gold in ft knox, you know? or anything like that? something you can exchange it for?” “it’s backed by the full faith and credit of the united states government!” “but didn’t the united states government recently get it’s credit downgraded?” “…”

the rebellions in this country have consistently been over taxes–the taxes on tea that led to the boston tea party, there was someone’s tax revolt that my memory of high school american history doesn’t supply me after 40 years… others i’m sure. ms savelle, 10th grade history teacher did teach one enduring lesson: “touch a man in his wallet and he’ll scream.” the ultra-rich are not stupid, they have excellent means of monitoring society: that monitoring is necessary to controlling society! they know they have squeezed us too hard. this past election cannot have escaped their notice.

with john boehner’s humiliation in the house of representative thursday night i’m very interested in seeing how this turns out over the next few months! the ultra-rich are loathe to cede one iota of power or so much as a dime of their –really OUR– wealth…


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