‘Their Skin Is Their Sin’

The United States has less than five per cent of the world’s population but nearly a quarter (twenty-two per cent) of the world’s prisoners. The prison population of that country is 2.2 million which is nearly one per cent of all American adults – that’s nine in every one-thousand.

Thirty-seven per cent of prisoners are black – which is thirteen per cent of the population. White men have a one in seventeen chance of going to prison in their lifetime compared to a one in three chance for black men (1).

These figures represent a real racial divide in America’s criminal justice system.

In Baltimore on April 12, 2015, Freddie Carlos Gray, Jr., a 25-year-old African-American man was arrested by police then taken to the local police station in a van. One week later he was dead. The officer driving the van was charged with second-degree murder, and others were charged with crimes ranging from manslaughter to illegal arrest (2).

For former prisoner Eric Lockett, police racism in Baltimore is a systemic problem. Since the months following Freddie Gray’s murder there have been no signs of any easing of racial tensions between the police and the black community in Baltimore. As far as the African-American community is concerned, it’s a case of “business as usual”, he says.

According to Lockett crime in the city is not indicative of an African-American problem but rather a “poor problem…where their skin is their sin.”. This reflects the fact that a disproportionate amount of the poor in America are African-Americans’ whose disproportionately high levels of criminality is linked to their disproportionately high levels of poverty.

What all this appears to indicate is that America’s extraordinarily high prison population and the criminal justice system that oversees it, is a cash-cow for big business (3). For an illustration of the criminal ties associated with the prison industrial complex, you don’t need to go any further than the detention centre built in the era of Abraham Lincoln in the east of Baltimore where a culture of racketeering, drugs and money laundering is said to have been endemic (4).

In 1971, African-American Eddie Conway was convicted of murdering a police officer and the prison in east Baltimore was where he served his sentence. Conway says “the prison turns out a lot of angry people that bring their anger back into the community.”

Despite the racial tensions and the disproportionate amount of poverty within the African-American community that breeds it in places like Baltimore – in addition to the disproportionate crime levels of those African American’s who are imprisoned as a result of it – there appears to be no serious commitment by the Obama administration to reform the U.S criminal justice system.

One has to ask the question to what extent is the lobbying power of the major corporations’ that constitute the prison industrial complex undermining the potential for reform?

References:

1. https://en.wikipedia.org/wiki/Race_and_crime_in_the_United_States

2. http://www.nytimes.com/2015/05/02/us/freddie-gray-autopsy-report-given-to-baltimore-prosecutors.html?_r=0

3. https://en.wikipedia.org/wiki/Prison%E2%80%93industrial_complex

4. https://www.fbi.gov/baltimore/press-releases/2013/nineteen-new-defendants-including-14-correctional-officers-indicted-on-charges-of-federal-racketeering-in-baltimore-city-jail-investigation

The ‘Marxist’ Venture Capitalist’s Vision To Save The World

“Inequality and the rise of a super rich elite is undermining the foundations of capitalism. The trappings of capitalism could be swept away by the pitchfork of revolution unless capitalism is fundamentally re-imagined”, so says American venture capitalist Nick Hanauer,

In an interview with the BBCs Stephen Sakur as part of the Hard Talk series of programmes, one of America’s wealthiest individuals argues that capitalism as currently configured is not working. The thing that drives Hanauer on is status not money:

“I’m not driven by money but by the need to be king of the hill. If capitalism doesn’t change fundamentally, it will destroy itself. If you allow wealth to concentrate in fewer and fewer hands over time, in the end it cannot be good for anybody, particularly people like me”, he says. “You show me a highly unequal society and I’ll show you a police state or a revolution.”

According to Hanauer, the notion that in ‘go get’ societies like the U.S people are able to crawl out of the clutches of poverty is true. However, there are limits: “Aspiration is a good thing”, he says, “But aspiration in the absence of opportunity creates resentment, anger and violence. The idea that if the disenfranchised are given more incentives they would magically become software engineers or Wall Street executives isn’t true.”

For Hanauer, the problems are more fundamental: “If we don’t get inequality under control then it’s likely to lead to war – a similar pattern that followed the last period of massive inequality between 1925 and 1940. The most capitalist thing you can do to prevent war is to build up the middle class. From a capitalists perspective, although it may seem a good idea in the short-term to impoverish the typical family, in the long-term it’s a catastrophe.”

Although Hanaeur posits that as an economic system capitalism has been beneficial to millions of people and “is the greatest system ever produced for lifting people out of poverty”, he nevertheless accepts it’s flaws. It fails, for example, to sufficiently “knit together agreements” thereby undermining the potential for a more equitable and sustainable distribution of the wealth that growth brings:

“In my state”, he says, “since 1990, close to 100% of growth has been accrued to just 1% of the top earners. People are beginning to get angry and increasingly less patient with a system that rewards nearly all of the benefits of growth to a tiny minority at the top.”

According to Hanauer, the crisis of capitalism is more acute than ever before and its problems are exacerbated by any lack of purpose which capitalism encourages: “Because we are social creatures, the only thing that gets to define society is our capacity to cooperate. In the absence of a shared purpose, people will not cooperate at which point the society will dissolve”, he says.

“Trickle down economics – the idea that the money of people who become rich – permeates down to the poor, is nonsense. How can it be anything other than nonsense given the fact that inequality is on the rise and socioeconomic mobility is in reverse? I’m not arguing against capitalism but simply saying that there are ways to optimize it – to make it better for everybody.”

Hanaeur is clear that his argument isn’t intended to be a moral one: “I’m not saying that we capitalists should pay workers more because we feel sorry for them, But the more they get paid, the better it will be for venture capitalists like me. The more money ordinary folks’ make, the greater the opportunity people like me have to innovate, create enterprises and sell them stuff. The better they do, the better I do”,

Hanauer then goes on to make the contention that the converse isn’t true: “A thriving middle class causes growth, not the other way round”, he suggests. “You can’t drive a consumer-based economy – which our economies are based on – with only the extreme wealth of the few. What we need to do is to boost the minimum wage in the U.S to 15 dollars an hour.”

Hanauer then goes on to imply that capitalism needs to be further controlled through a system of planned and coordinated regulation:

“Capitalists have the idea that THEIR things will be bought by everybody else as a result of higher wages paid by OTHER capitalists. But this logic of paying higher wages to staff to help improve business activity more generally, doesn’t seem to apply equally to them since they will insist on paying THEIR OWN workers next to nothing thereby not absorbing the costs themselves. The simple truth is, if a higher minimum wage was introduced universally, not only would it be affordable, but something like 40% of American’s would be able to buy more products from everybody thus benefiting all capitalists across the board. Business is challenged today because fewer and fewer people are able to buy things.”

As far as the possibility of change in the future?:

“Most American’s have accepted this bankrupt idea of how you create growth in capitalist economies. If you think that wealth trickles down from the top; if you think that the rich are the wealth creators, and if you think that the more rich people you have the more jobs you will create, then the notion that the introduction of a high rate of tax for rich people makes no sense. However, if you reject that false idea of how capitalism works and you accept a more realistic 21st century notion that the more workers earn, the more customers’ businesses have and the greater the level of jobs that will be created, then you will understand that it’s part of a feedback loop in which everybody wins. The battle ahead is to change the parameters of debate around these things. At the moment we are on the wrong track.”

http://www.bbc.co.uk/iplayer/episode/b05ndjm9/hardtalk-nick-hanauer-venture-capitalist

Dung Of The Devil: Share Buy-Back’s

Speaking to grassroots organizers in Bolivia on Thursday (July 9), Pope Francis made headlines for using the phrase “the dung of the devil” in reference to today’s world economy. “Today”, he said, “the scientific community realizes what the poor have long told us: harm, perhaps irreversible harm, is being done to the ecosystem. The earth, entire peoples and individual persons are being brutally punished. And behind all this pain, death and destruction there is the stench of what Basil of Caesarea called “the dung of the devil”. An unfettered pursuit of money rules.” (1).

He continued:

“The service of the common good is left behind. Once capital becomes an idol and guides people’s decisions, once greed for money presides over the entire socioeconomic system, it ruins society, it condemns and enslaves men and women, it destroys human fraternity, it sets people against one another and, as we clearly see, it even puts at risk our common home” (1).

Perhaps the Pope had the stench of economic short-termism – personified by share buy-backs – in mind when he made his comments. Certainly, the consequences for the planet and people resulting from their impacts are potentially catastrophic.

The policy by which the CEOs of major corporations buy back their own shares resulting in the particularly rapid and unsustainable rush towards feathering their own nests at the expense of everybody else, is a relatively recent phenomenon. These unscrupulous but legal business practices are predicated on short-term planning decisions that usually trump any commitment to long-term investments in other areas of the business. Instead, these giant corporations use their huge influx of cash to buy back shares in their own companies. This subsequently increases the short-term value of the stock of these companies. They then reap bigger bonuses because their remuneration is tied to the value of these stocks.

All the money that we, the tax-payers, poured into the banks on the premise that the money accrued would be lend to small businesses, was in reality kept by the elite bankers. These bankers then bought back stocks in their own banks with the money resulting in a jump in the value of these banks. As their values increased so did the amount of bonuses for those at the top. This is because these bonuses are reliant on the value of the stock.

The practice of stock buy-back essentially destroys the long-term future health of the companies’ that the CEOs, who grab the bonuses in order to feed their immediate greed, are being paid to run. This is a reflection of what is happening in society at large. In other words, humanity is in effect plundering the resources of the planet so as to satisfy the insatiable appetite of the elites – and to hell with the consequences.

This is not a small problem but an extremely huge one. For instance, in America the top 500 companies spent a massive 95% of their operating margins (profits) on their own shares or in dividend payouts to their own shareholders. In more rational times, the kind of sums previously described were spent on things like research and development, investing in new products and the training of new staff for the long-term health of the company. But hardly anybody appears to be remotely interested in anything long-term anymore. Buy-backs are on course to exceed 100% of profits. At that point major corporations and banks will be borrowing money to buy their own shares. As the share price increases, the elite within those organisations will receive even larger bonuses.

This is not how it’s meant to work. Stocks are supposed to be issued to companies in order to increase future growth – that’s the whole point of them. But with buy-backs the opposite is happening. Capitalism has been transformed from a system in which it was possible for the masses to engage in the game of money where the potential to win was real so long as you took part. Now the game is rigged whereby only a handful of have’s are able to grab even more for themselves while the public pot of cash for the rest of humanity continues to shrink.

Larry Fink, head of Black Rock, is the biggest asset manager in the world. He shifts 4.6 trillion dollars of other people’s money. As a leading capitalist, he is clearly wise enough to grasp that the modern brand of capitalism that buy-backs typify, represents the rope to capitalism’s hangman. This is a man who presumably knows a thing or two about the destructive impact of buy-back’s. This is what Fink had to say:

“The effects of the short-termist phenomenon are troubling both to those seeking to save for long-term goals such as retirement and for our broader economy. “Such moves”, he says, “were being done at the expense of investing in innovation, skilled work forces or essential capital expenditures necessary to sustain long-term growth” (2).

What Fink describes is akin to a farmer eating the seeds that he needs to plant during the following years crop. He’ll feel full now, but next year he’ll starve. Except in business the management won’t be there when the results of their short-termism are realized – instead, they’ll likely be lying on a beach in the Bahamas.

Larry Fink’s critique of share buy-back is beginning to gain traction with other leading capitalists, most notably Nick Hanauer who has grasped the necessity of government regulation to prevent companies buying their stock back. Hanauer defines the strategy of stock buy-back as:

“Plain and simple stock manipulation – a pernicious gain of generating increasing amounts of money for people at the top while giving short shrift to employees and the country as a whole. Thirty years ago, corporate CEOs earned thirty times the average wage, now it’s three-hundred to five-hundred times. This practice of buy-backs is at the heart of it” (3).

This is how the elite constantly get richer while at the same time refusing to pay their staff a living wage which the rest of us help top up. Many leading capitalists (Hanauer is one of them) agree with politicians’ from the left like Jeremy Corbyn who insist there needs to be a substantial increase in the minimum/living wage across the board to counteract the public underwriting of those CEOs who pay poverty pay while simultaneously enriching themselves through stock manipulations.

Progressive capitalists like Fink and Hanauer don’t argue for a substantial increase in the living/minimum wage and for regulations to prevent stock buy-backs because they are altruistic, rather they recognize these actions are necessary in order to save capitalism from itself.

References:

1. http://www.news.va/en/news/pope-francis-speech-at-world-meeting-of-popular-mo

2. http://www.nytimes.com/2015/04/14/business/dealbook/blackrocks-chief-laurence-fink-urges-other-ceos-to-stop-being-so-nice-to-investors.html?_r=1

3. https://www.youtube.com/watch?v=5ebh-v_mVPo

Dead Labour

Following Harriet Harman’s admission that the purpose of the Labour Party is to outflank the tories at the expense of any allusion to principle, she might have just put the final nail in the coffin of the party, That said, the heart of the beast hasn’t stopped beating quite yet and it could be revived if leadership contender Jeremy Corbyn comes to its rescue by winning the forthcoming battle.

Harman’s claim that she would not oppose Tory benefit cuts was only surprising in the sense that she was being frank about it. Should Labour die and what remains of the corpse align themselves with the Greens and other progressives, the English people will be reliant on the SNP coming to their aid on their behalf.

Just as the bankers are now in a stronger position than they were prior to Syriza in Greece coming to power as a result of the former’s usurping of national Greek sovereignty, so too will the Tories should Corbyn lose..

In challenging the Osborne/Harman narrative, what used to pass as positively centrist, is now regarded as dangerously revolutionary, particularly when the issue of raising taxes for the rich is concerned..This is what Corbyn had to say to Sky’s Adam Boulton yesterday evening:

Corbyn:

“I think we have made a mistake on giving so much ground to Osborne, particularly on the treatment of young people in the budget and treatment of people in larger families. Why should the third and subsequent amount of children be penalized depending on the random date in which they happen to be born?

Boulton:

“Why should the tax payer support larger families”?

Corbyn:

“We have a system in which even Thatcher signed a European convention protecting the rights of the child. What number were you”?

Boulton:

“I’m playing devils advocate. This is only going to be introduced for future families and that they have a choice as to how many children they have. Surely encouraging families to have a smaller amount of children must be a good thing.”

Corbyn:

“I agree. But they don’t need encouragement. People having small families happens anyway. The average family size over the last 50 years has come down. But because of the idea that there are some large families, that children should be penalized for being born, is simply not right. We could cut rising welfare expenditure by capping rents thus saving on housing benefit and improving drastically the living wage thereby undercutting the subsidising of low pay paid through benefits – a system that currently works to the advantage of large multinationals like Tesco. We need to pay people more so the tax yield is greater and the economy does better. It’s a win-win situation.”

Boulton:

“How are you going to pay for it”?

Corbyn:

“We have to raise the taxes of the wealthiest. Over the last few years, child poverty has increased, homelessness has increased, the use of food banks has increased and overcrowding in houses has increased. So we need a different and more humane approach to welfare.”

Is It Time To Acknowledge The Underlying Cause Of Palestinian Suffering?

Drawing on C. Wright Mills’ seminal work on The Power Elite, power structure research by Bernd Hamm, indicates the existence of four concentric circles – the inner two of which comprise a combination of elite clans of super wealthy individuals, CEOs of giant transnational corporations and the biggest international financial players.

The two inner rings represent the most powerful in society. Their influence is international compared with the national character of the outer two rings. Russian and other eastern European oligarchs as well as familiar names in the international scene of banking and international finance such as Soros, Gates, Buffet, Zuckerberg, Adelson and the Koch brothers, also comprise these inner two circles.

For the purposes of this article, it should be noted that Hamm’s research would suggest that Jewish power is disproportionately represented within the global hierarchy of power. There are legitimate historical reasons for this – an explanation of which is beyond the scope of this article.. Pertinently, the issues relating to elite banking and finance and the capitalist economic system that overrides it, cannot be disentangled from the relationships of power of those who largely maintain control of it.

We have seen how the banking system that comprise the Troika have effectively enslaved Greece, but rarely is the issue of Jewish power that is integral to it discussed – particularly, but not exclusively, in relation to the adverse impact this has on the Palestinian people.

It is alarming that a a powerful ethnicity who share the same sociopolitical, philosophical and cultural outlook that has given rise to Jewish identity, have a disproportionate influence within the realm of global power politics.

The dominant ethnocentric Jewish character of ostensibly pro-Palestinian and anti-Zionist organizations like JVP and BDS has arguably resulted in the development of a culture of controlled opposition to ending Palestinian oppression. That fact alone ought to be worrying to anybody who has the interests of the Palestinian people at heart.

Can a link really be made between an ethnocentric, supremacist and racist category on the one hand, and the support for the oppressive policies of the Israeli state and Jewish identity politics within the UK Jewish diaspora on the other?

An exclusive poll for the Jewish Chronicle revealed that two-thirds of British Jews who have a view on the last Israeli election would have voted for Prime Minister Benjamin Netanyahu’s Likud party.

Netanyahu was re-elected on a mandate that a Palestinian state would not be established on his watch –  a corrective to the succession of pronouncements by Israeli statesmen that have hitherto lied and misled the world.

Meanwhile, an overwhelming 69% of British Jews said they voted for the right-wing conservatives in the last election  Could the reason have been that a higher amount of Conservatives MPs (80%) are Conservative Friends of the Jewish state whose population re-elected into power a leader on a mandate of overwhelming Israeli-Jewish support for Operation Protective Edge.

According to a survey published last July, 91% of Israeli Jews supported Israel’s campaign against the people of Gaza and just 4.2% believed the opportunity was a “mistake”. Just 1.5% of respondents opposed the airstrikes.

Seemingly, the UK Jewish diaspora on the one hand, and the Jews that comprise the Jewish state who re-elected and the right-wing leader of Likud into power who is responsible for the continued oppression of the Palestinian people, on the other, are synonymous.

Interestingly, in February, the BBC published a poll that measured British Muslims’ attitude towards Britain. Unlike the majority of Jews who expressed their will to leave Europe, 95% of Muslims here are “loyal to Britain”.

The Enslavement Of Greece

Austerity has won. The demands of the Troika upon which Syriza caved in to – or as some commentators have alluded acquiesced – are intended as a warning to the rest of Europe that a left-wing government anywhere will not be tolerated.

Non-capitulation by Tsipras would have effectively been construed as something akin to the threat of a good example being set to the rest of the nations that comprise PIGS. Thus, this outcome would have been regarded by the banking clique that dominate the Troika as totally unacceptable.

What has happened in Greece is a lesson for the rest of us. I am in absolutely no doubt at all that European democracy is in the process of being usurped by an unelected elite at the top of society. Teachers and other public sector workers who previously might of been reluctant to take to the streets of Athens, will soon be scouring the bins for food along with the unemployed. Riots and looting will follow in due course, of that, I’m certain.

Lucid and concise analysis of the issues that led to yesterdays “negotiated” settlement resulting in yet more Greek bailouts in return for yet more austerity, has been hard to come by in the mainstream media. The exception was the analysis by professor Mariana Mazzucato on the UKs Channel 4 News (July 12).

“In financial terms, where is the capital of Greece tonight?”, inquired anchor, Jon Snow.

“Is it in Athens, is it in Brussels, or is it in Berlin?”, he continued.

“In some ways it’s in the banks”, retorted a smiling but incredulous Mazzucato.

The professor continued:

“I think we forget sometimes that only 10% of the bailouts went to the Greek economy. The rest went to the banks who were bad lenders and they are not paying any price. After WW2 not only was 60% of Germany’s debt forgiven but also we had the Marshall Plan which provided an investment package. With Greece we are just postponing the crisis until the next bailout.”

Mazzucato then went on to outline some of the myths perpetuated by the bankers and offer some sensible remedies:

“Privatization is not accompanied by employment and investment. What we need is a coherent package that allows Greek businesses to compete with German businesses as opposed to destroying them” continued the professor. “We have to learn from Keynes”, she said.

“There was a problem of aggregate demand in Germany after the Schroeder reforms when there had been a massive wage restraint. There was excess cash in the German banks. These banks lent to the Greek banks which lent to Greek businesses who then bought from German companies, So this was part of Germany’s export strategy.”

Placing the emphasis for the crisis squarely on the shoulders of the bankers, and outlining further alternatives to the established media narrative, Mazzucato went on to say:

“The same problem of aggregate demand is happening in Greece where we are not allowing various types of workers to benefit from investment packages.This will not only increase the number of jobs but the quality of jobs. The Syriza government was running a surplus. There were already massive reforms in place but the Greek government were not given time to implement them. As a government they are far from perfect, but the idea that they were governing badly is a mischaracterisation of what has been happening.”.

http://www.channel4.com/news/greece-deal-tsipras-eurozone-bailout-merkel-hollande

The Lesson Of Greece – Stuff Your Money Under The Mattress.

The manager of one of Britain’s largest bond funds has effectively urged investors to put their money under their mattresses. Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds, is concerned that what he describes as a “systemic event” could rock markets possibly to the magnitude of the crisis of 2008 (1).

What Spreadbury advises people to do is increase their liquidity by ensuring they have access to physical money. Spreadbury is honest enough to address concerns relating to global debt, particularly mortgage debt. It’s in the interests of banks to increase the value of property. So what they have traditionally done is to lend ever larger amounts of money to individuals. The circulation of increasing amounts of debt-fueled cash for mortgages results in greater competition for property. This in turn, means an increase in prices resulting in banks’ lending even more money, and so on and so forth.

For the bankers this process amounts to an apparent never ending cycle of growth. But for the vast majority of the rest of us, its an increasing burden of debt. Mortgage debt is being pumped up to record levels. What Chancellor Gideon Osborne is relying on for future demand is an ever-expanding household debt which is already tipping £2 trillion a year. The financial crisis in 2008 largely resulted from the fact that many people acquired houses and goods with money they didn’t have. Since then, more people have acquired even more houses and goods at greater expense with money they don’t have.

Seemingly, the only thing people learn from history is that nobody learns anything from history. Given the fact that our mistakes are part of a continuum, one might reasonably argue it’s not even an historical thing but rather akin to placing ones left hand into a fire to retrieve a coin, getting burned and then using the right hand to do the same in the false hope that the result will be different. The current record level of debt is predicated on historically low levels of interest. Problems will inevitably arise further down the line when interest rates begin to climb.

One might think that putting savings into a bank would be a more secure option than taking on a potentially precarious mortgage debt. But I wouldn’t count on it. The Financial Services Compensation Scheme (FSCS) is supposedly intended to cover depositors for a limited amount invested per bank in the event of any collapse (2).

But under such circumstances, depositors’ would likely panic and demand all of their cash back at the same time. Inevitably there would be shortfall of available cash since the banks who in theory hold it would be unable to release it on mass given that it would almost certainly be tied up in high risk off shore investments.

Will the government be in a position to underwrite each individual depositor? Not so according to Spreadbury who says that such a suggestion is unfunded (3).

Following the 2008 crisis, the line pumped out by the leading figures within the establishment, was that governments’ could not allow banks to collapse because as institutions they were too big to fail. It was this rationale that underpinned their bailing out by taxpayers’. The government have since made assurances that tax payers’ money will no longer bail out failing banks (4).

But here’s the problem. The reach of these banks is greater now than previously because other smaller banks that were teetering on the edge have been swallowed up by the larger ones. So the banks who in 2008 were regarded as being too big to fail are even bigger in 2015. Contrary to government claims, taxpayers will continue to underwrite the inevitable future collapse of these larger banks at a far greater cost to the tax payer at least until 2019 (5). This is be predicated on the notion that in doing so the government will be protecting the savings accounts of depositors to the value of £75,000 (downgraded from the supposed FSCS limit of £85,000) (6).

The priority of government is to protect the bankers from their own incompetence, as opposed to protecting depositors in the event of a run on banks. As far as the banking racket is concerned, losses are ‘socialized’ and profits ‘privatized’. So for them, it’s ‘win-win’ situation.

Due to the close knit ‘revolving door’ culture that exists between leading parliamentarians’ taking their places on the boards of financial companies’ following their “retirement”, and the fact that the irresponsible actions of bankers continue to be underwritten by the tax payer, there is no incentive for either the politicians or the the bankers to change their destructive course. The continued suffering of the Greek people resulting from austerity in which their government is implicated, cannot be divorced from this kind of close knit relationship.

It was, for example, no accident that Greece didn’t do the rational thing by defaulting on its debt but has instead decided to continue with the ‘negotiation process’ predicated on further bail-outs. As Craig Murray succinctly put it, “the ‘Troika’ [of creditors comprising the EU, ECB and IMF] is very keen that there will be another bail-out because of course the money goes to the bankers to whom the political elite are beholden” (7).

In Britain we can see how this insane system has played out in terms of the so called relationship between house price and stock market inflation and what we have been told has been a growth in living standards. House prices in Britain have risen by 26% since 2009. In London during the same period they have risen by a massive 68%. Meanwhile the footsie 100 increased by 75%. And yet the economy is no better then it was in 2009. “Green shoots” have been talked about for years but never materialized. Stock markets and particularly house prices – which some forecasters assert could double within the next five years (8), has no bearing on reality (9).

We have reached a stage in human development whereby an elite backed by governments’ are able to gamble the money of other people with impunity. Even if by some quirk of nature, we as humans make it into the next century which on current trends seems increasingly doubtful (10), future generations’ will surely be amazed at how we have allowed the actions of a small parasitic minority to effectively asset strip the public realm owned collectively by the vast majority whose well-being and, in some cases, very existence depends. Craig Murray put it well when, in relation to Greece, he stated that “It will seem strange to future generations that a system developed whereby middlemen who facilitated real economic transactions by handling currency, came to dominate the world by creating a mathematical nexus of currency that bore no meaningful relationship to real movements of commodities” (11).

The price of nearly all assets – shares, bonds, property, land etc – have been rising for years. One of the reasons why this is so is because the money we have used to prop up the banks has not been to make them more secure in the long-term. The bankers are not interested in long-term stability but, on the contrary, are motivated by short-term gain. The way to ensure short term gain is to encourage people to buy assets. If, for instance, a lot of people invest their money into the same company by buying shares, then naturally the value of those shares will increase and so will their return on their initial investment. It can appear, therefore, that it’s of mutual interest to pump up these assets like a body-builder on steroids. Of course, rather like an over inflated balloon, these assets will at some point explode.

Writing in the Daily Telegraph, Jeremy Warner, states, “The trigger for an inevitable “correction” [financial armaggedon] could come from a clear blue sky – a completely unanticipated event” (12).

A systemic event could, in other words, rock markets thus precipitating another financial crisis akin to 2008 – a “recovery” which we haven’t yet recovered from. The last thing leading investment brokers – who advise investors as to where and what to invest in want to do, is to advise people to hold on to their actual money. Obviously, this is because in so doing, it doesn’t profit them personally. But that’s precisely what many of them ARE doing.

Have we escaped the worst of the crisis that began in 2008 or is the worst yet to come? The unresolved crisis in Greece, as well as the advice of people like Ian Spreadbury, would suggest we may be merely delaying the inevitable.

References:

1. http://www.telegraph.co.uk/finance/personalfinance/investing/11686199/Its-time-to-hold-physical-cash-says-one-of-Britains-most-senior-fund-managers.html

2. http://www.fscs.org.uk/

3. http://www.telegraph.co.uk/finance/personalfinance/investing/11686199/Its-time-to-hold-physical-cash-says-one-of-Britains-most-senior-fund-managers.html

4. http://rt.com/business/204155-taxpayer-bank-bailouts-rules/

5. http://www.bbc.co.uk/news/business-29982181

6. http://www.telegraph.co.uk/finance/bank-of-england/11715807/Banks-to-cut-protection-on-deposits-to-75000-from-January.html

7. https://www.craigmurray.org.uk/archives/2015/07/bail-out-or-sell-out/#comments

8. http://www.telegraph.co.uk/finance/property/house-prices/10216786/House-prices-Why-prime-London-property-could-double-by-2020.html

9. http://econlog.econlib.org/archives/2015/02/the_housing_bub.html

10. http://www.informationclearinghouse.info/article42281.htm

11. https://www.craigmurray.org.uk/archives/2015/07/bail-out-or-sell-out/#comments

12. http://www.telegraph.co.uk/finance/economics/11679761/Are-overvalued-stock-markets-heading-for-another-crash.html