The big banks, the big insurance companies and the U.S. Government are just separate departments of the same corporation. These unified multi-billion dollar corporations are already bankrupt! Why do I say this; because they have fallen into the biggest economic trap of all time by leveraging wealth they don’t possess. When the only way to keep the ledger in the black, is by borrowing money, the economic future of the country that allows this practice is on borrowed time!
Investment is a matter of trust. If everyone were to ask for their investment money back, the debt would be too great to be repaid! The power and influence that large corporations have is on paper only. If Congress wants to crawl out from under the rock of “investment tyranny”, it is going to take real courage. I don’t expect that will happen but I hope I’m wrong. The most likely scenario will be war! War is not a cure to these economic ills but yet another wrong path, which only gives the illusion of a cure.
It’s hard to imagine that it is greed that fuels war but it is an unfortunate circumstance of “investment tyranny”.
Economy is not about money but the production of commodities. Money is supposed to represent commodities but greed and the banking system have allowed another economy to emerge, the investment economy.
An investment economy is an economy on paper, a matter of trust.
A bank is supposed to be a place where security is provided for valuables and money. However, once banks got the idea that they could loan other people’s money out and charge interest on the loan, they caused a “fake economy to be formed”.
The game of monopoly is a great way to explain how this machine we call economy works. You start off with several players who are given an equal amount of money. The players roll the dice and begin to move around the game board buying properties as the opportunities present themselves. The law of physics dictates that motion results in change, as a result eventually, one person winds up with all of the properties and all of the money. This is how the game is won in monopoly. However, in the real world, the other players don’t go home when the game is over, they are still there.
In real life, the winner of the game must keep the others happy or they will kill him. Poverty and starvation is a great motivator for destruction of self and others. The “have not’s” will eventually rise up and take by force from the “haves” and redistribute the wealth; however, not evenly and the cycle begins again.
In the game of monopoly, if the winner figures out a way to redistribute the wealth, just enough to keep the game going, then they maintain wealth, power and control. This can be done in the game of monopoly when the winner pays the other players to do tasks such as roll the dice for the winner or do assigned chores. As long as the winner continues to redistribute the money, the game continues. However, the wise monopoly player never gives the losers enough money to buy property but rather only enough to stay in the game, roll the dice and move their token around the board. This strategy only works well as long as the losers accept the boundaries of the game as dictated by the winner. Eventually there comes a time when the losers demand the ability to buy property and little by little, the winner must give up power. This constitutes the “majority minority cycle” and it works like a clock!
The “majority minority cycle” works and it doesn’t matter if it is with money or with people; in fact, people (minorities and majorities) and power (minorities and majorities) are inextricably combined in this “dance of physics”.
Economy is not static; like all things in the universe, it is constantly in motion. It is either expanding or contracting. Like respiration; we take in fuel (oxygen) and release waste (carbon dioxide) in the form of heat. This release of heat regulates body temperature. The mind, the body and society can only take in so much before they must release the waste.
When the human body releases carbon dioxide, it is not wasted. Our waste becomes the fuel for another species of being… plants. Plants take our waste and reconvert it into oxygen. This completes the circuit of respiration. The process of respiration is a mathematical equation that works. Everything must complete a circuit in order to work properly. However, what happens when greed is one of the variables in the circuit?
The problem with our economy is simple. Wealth doesn’t represent commodities. It doesn’t represent work. Most people become wealthy because they rolled a seven instead of a three. This is not to say that there are hardworking people out there who do not deserve their wealth; but there are a number of equally hard working people who do not! Even those hard working intelligent people, who do well, must also roll a seven!
Because economy follows a cycle, it is easy to predict the outcome. It is not easy to predict “when” an economy will fall but it will fail eventually, as long as greed is a component of the economic equation. When money no longer represents, within a margin, goods produced, a synthetic economy will take its place.
A successful economy is always expanding. Just like in the game of monopoly, when all of the money is the hands of one person, the winner must continue to pay players to roll his dice for them but the wealth of the winner can only expand if more players come into the game and in the real world, bringing their own money with them. The wise winner wants to control the boundaries of the game but in order to bring new players and new money into the game… they may have to sweeten the pot a bit for the new comer. They may have to widen the boundaries.
The evolution of rules is a good thing as long as they are always moving in the direction of a better and more fair game. In this way, the best players will triumph and society will improve. Maintaining power and creativity are products of two different energy sources. It is more difficult to be creative when all of our energy is being used to maintain power. The underdog has everything to win and those in power have everything to lose. When we have nowhere else to climb, there is only one other way to go. We can start over or we can wait for the inevitable. Like ageing, those who wait for the inevitable, slowly erode. The cycle of economy is like the life and death cycle. The old must die so that the new can have their time at the wheel of life.
When we fight the current of the cycle of life and death, we do not just erode physically, we erode spiritually!
As the vehicle of money redistribution slows, the powerful must expand their search for new players and so the international market is born. Once an economy becomes an international one as our economy is today, there is nowhere else is to look for new players. There are two answers for this; the first is to allow the old structure to collapse. When our leaders finally allow logic to be their guide as opposed to greed, the old system which facilitated investment tyranny would be abandoned and the production of commodities would be represented by the market. However, if we allow greed to take precedence, we will destroy one or more of the players, take their wealth and begin the game again… war!
The stock market is a Ponzi scheme. It no longer represents real wealth if it ever did. The stock market is a device based on speculation. In other words, it is what those in power want you to believe.
A Ponzi scheme is simple to understand. A person establishes a game and asks other players to join the game. In order to play the game, the players must contribute so much money to the pot. In return, the facilitator of the game pays the players so much money from the pot. The way the game works is to continually invite more players to the game. As more players come into the game, the pot grows and everyone is getting paid. If the game can maintain itself with new players, the oldest players can make a profit. However, the game ends when the new players stop coming in or the facilitator begins to take too much from the pot for themselves. Either way, the Ponzi scheme, like the stock market game, must eventually end.
War does not solve the problem of economic erosion; it simply postpones it for a while. Redistribution of wealth is not the solution. Allowing money to represent the labor of those who produce commodities is!
We win the game by chance. It doesn’t matter how smart, creative or industrious we are; chance is still a constant in success. Intelligence, creativity and industriousness only work for those who possess these characteristics in a society that is not corrupt; a society that rewards real work which results in the production of real goods. Money is not a commodity.
Our world is heading toward an economic collapse which will lead to war. The only way to avert this is for those who live within society to understand the mechanism that drives economy and through understanding, take the rein of power and use it wisely. If they do not, the “minority majority cycle” begins again.
AUTHOR: J.S. THOMPSON
About the Author…
J.S. Thompson is a retired senior government official with a graduate degree from the University of Texas.
Invitation to read other articles I’ve written referencing this subject matter, as follows…
Corporate Bailouts… Is Government Postponing the Inevitable?
Wall Street, the Greatest Ponzi Scheme