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The Most Positive Possible Outcome Of The Current Financial Crisis In Europe

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FarCenter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-06-11 05:40 PM
Original message
The Most Positive Possible Outcome Of The Current Financial Crisis In Europe
We are being throttled by the Big Lie: we're told that if the predatory financial system implodes, we'll all be ruined. The opposite is true: the only way to save our economy is to let the corrupt, pathological and flawed financial system implode.

I was recently challenged by a contributor to write something positive, and so I decided to write about the single most positive outcome of the current financial crisis in Europe: the complete collapse of the corrupt, predatory, pathological global banking sector and its dealers, the central banks. Exploring why this is so reveals the insurmountable internal conflicts in our current financial system, and also illuminates the systemic political propaganda which is deployed daily to prop up a parasitic, corrupting, pathologically destructive financial system
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Vincardog Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-06-11 05:41 PM
Response to Original message
1.  Net recommendation: +1 votes (Your vote: +1) Burn baby burn a few pertinent paragraphs follow
Edited on Sun Nov-06-11 05:49 PM by Vincardog
The entire global financial system is thus based on the equivalent of a perpetual motion machine: money can be borrowed or leveraged into existence in essentially unlimited quantities, and then deployed in risk-free skimming operations to harvest unlimited wealth.
What does this promise of using leveraged capital to skim risk-free fortunes do to the "real economy" of production and investment in plant and technology? It guts it. The risk of industrial Capitalism is real and cannot be hedged away; high-risk investments may blow up or they may return high yields. It literally makes no sense to risk real capital in productive Capitalism when a zero-risk skimming operation can be developed that essentially needs near-zero capital.
Thus financial capital has come to completely dominate industrial or productive capital. The pernicious consequences of this dominance have poisoned the economy and culture on multiple levels.
In the political sphere, the aggregation of hundreds of billions of dollars in skimmed profits gave Wall Street and the banking sector unlimited budgets to buy political influence. This created a monstrously pathological feedback loop: the more political influence Wall Street bought, the higher their returns on financialization skimming.

Read more:
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libinnyandia Donating Member (526 posts) Send PM | Profile | Ignore Sun Nov-06-11 06:35 PM
Response to Original message
2. At least this time the problems won't lead to a world war.
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sabrina 1 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-06-11 06:43 PM
Response to Reply #2
3. I think the war already began. It is a financial war by the
Global Monetary powers on the people of the world. It didn't begin in the First World, it has been ongoing in the third world for a long time. But now they invaded the First World so we are finally aware of its predatory nature and its disastrous effects on the people. Several years ago eg, I saw an article on food riots in India and wondered if that could eventually happen in Europe and even here.

Look at how the Oil Cartels, BP eg, have been operating in third world countries. They have killed people who have tried to stop their destruction of their lands and waterways.

Germany's Merkel said something last week that was pretty chilling, when Papandreo, the Greek PM made a simple suggestion that the people of Greece should have a say in whether to accept the brutal policies of the IMF on their country and stated he would hold a referendum to let them decide. The reaction to this suggestion that in a Democracy the people should have a say, caused a backlash against him, with Merkel stating that if this were to happen, you know, Democracy, 'we cannot guarantee another fifty years of peace in Europe'.
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Turbineguy Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-06-11 06:57 PM
Response to Original message
4. For most people
Edited on Sun Nov-06-11 06:59 PM by Turbineguy
The financial system they use (checking, savings, credit cards mortgages and car loans) worked just fine (not perfect, certainly room for improvement, but good enough) prior to the 1999 deregulation.

Sending the world back several hundred years will not turn out well.

Most of the problems as they are now has a basis in derivatives as well as a bloated financial industry. There are some relatively simple things that have already been suggested with derivatives, like only those with skin in the game can trade them (airlines hedging against rising fuel prices, farmers in wheat etc).

People who do this financial voodoo do so because it is profitable (that is: puts the cost on someone else) and it's allowed by government. The reality is that most of these derivatives are worthless anyway by virtue of the fact that there isn't enough money to cover them. The value of the derivatives cannot be greater than the value that underpins them.

Do people that hold these derivatives think only they will get paid but nobody else? Like the signs says: "We cheat the others and pass the savings on to you!"
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Quantess Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-06-11 07:09 PM
Response to Original message
5. Max Keiser says that the banks are holding the people hostage.
That about sums it up.
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s-cubed Donating Member (860 posts) Send PM | Profile | Ignore Sun Nov-06-11 07:23 PM
Response to Original message
6. Best explanation of how financia markets (don't) work I ever read. nt
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