Millions of lives (and whole countries) are regularly destroyed (financially) by Asset Bubbles! Yet most of our educators do not understand how or why that happens! Seems our Educators need more education?
Even our children should understand how & why that happens!
Manhattan Financial District.. Where trillions of dollars of (paper) Derivatives are produced..
What a visual contrast to the other side of the Hudson river - New Jersey,
where much of the USAs USEFUL goods are produced..
Above, foreground - low-rise New Jersey - west side of the Hudson River.
Jersey is home to over 20,000 manufacturers of machinery, electrical goods, pharmaceuticals, instruments and apparel. It is one of the major backbone areas of the USA - and yet it is also the most 'joked about' and 'put down' states.
This contrast of "Edifice" hi-lights the contrast of money levels (and arrogance) - As one trader said, "In Jersey, I could make a sound 10% return per year. Here, I can make a 10% return in a minute!"
One side of the Hudson is definitely sustainable. Not sure about the other side!
Below - New Jerseys vast flat skyline seen from Manhattan..
100 Trillion dollars of Derivatives are continually traded via the worlds Financial Markets..
The edifices of 'Wall Street' (see above) are largely funded by small "Transaction Fees" and Commissions on those millions of derivative transactions per second.
(Trading value = $30 million per second!)
The problem is.. Those 100 trillion dollars of derivatives are a figment of the imagination!
There is nothing like that amount of "Money" anywhere on this planet!
It's equivalent to 100 thousand Investors each believing they have a billion dollars of derivative assets on their balance sheets! (100 thousand by a billion each equals 100 trillion)
But, if only 2% of those Investors want "their money" in cash at the same time - It won't "be there" and the whole 100 Trillion dollar bubble will burst! And after legal fees, NOT ONE of them will get anything back! (Note.. 100 trillion of derivatives is what can be confirmed, many authorities estimate 8 times that amount. Eg. The Economist magazine - June 2011)
Financial Bubbles (and their Busts) are very common!
Every generation of 'Banksters' since the 'crash' of 1796 (when a Land Speculation bubble burst) has created an 'Asset Bubble' - and every generation of public savers/investors has lost most of their money when it popped!
The 13 famous 'Crash' years are.. 1796, 1819, 1837, 1857, 1873, 1882, 1901, 1929 (The Great Depression), 1938, 1973, 1987, 2000 (the Dot Com) and 2007. (About every 20 years!)
The Banksters loose nothing, they always have their massive commissions safely stored in the 'Cayman Islands' - and, every time, their Failed Banks are rescued by the taxpayer. (How convenient!)
Those in the finance sector are a privileged class.
They can make mistakes in the hundreds of billions of dollars without any significant penalty, they collapse dozens of banks and so destroy the lives of a million taxpayers! And no one goes to jail!
Those taxpayers left standing are then required to bail out those destroyed banks so the Banksters can start the next bubble in motion. Our weak politicians wring their hands and say "who could have foreseen that coming?" (A child could have! - 13 times in 13 generations?? It's like Clock-work!)
We don't suppose the fact that the re-election campaigns of these politicians are largely funded by 'Wall Street' has any bearing on political lack of judgement?
Quote from www.macrobusiness.com.au
"The global financial crisis and its subsequent repercussions were the inevitable consequence of governments’ abrogating their responsibility to govern.
In thrall to nonsense arguments about “financial de-regulation”, they weakly handed over the job of setting the rules of money to the markets."
The question that needs to be posed of our politicians is:
“How did they ever imagine that the financial system was not their political and moral responsibility?”
Then perhaps they may notice how they have been seduced by nonsense arguments.
It is an old problem.
Witness these comments from US president James Garfield in 1881:
“Whoever controls the money of a nation, controls that nation and is absolute master of all industry and commerce. When you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”
(Editor.. Garfield was assassinated 2 weeks after that statement! - He had well known plans in place to ham-string those "powerful men")
Under the (banker-bribed) eye of several presidents, Wall Street investment banking firms were given permission to gamble with their depositors' money that was held in affiliated commercial banks!!
(Ref: The repeal of Glass Steagal by Clinton.)
These bankers even believe they have the right to promote, recommend and sell fancy investment schemes to their own clients while also planning to collapse that investment scheme with a massive 'naked short' sale. Their self-defence in front of one angry judge was "This is 'normal practice', these are sophisticated strategies, if our clients don't understand these 'normal sophisticated schemes', they shouldn't be playing the game!"
U.S. President Andrew Jackson (1829) said..
"If the American people only understood the rank injustice of our money and banking system - there would be a revolution before morning..."
Quote from Daniel Webster, senator Massachusetts, 1850, Secretary of State under three presidents.
"We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; representing nothing but broken promises, bad faith, cheated creditors and a ruined people."
Quote from John Danforth, 1968, Missouri Attorney General..
"Deep down in our hearts, we (senators realize that we) have been accomplices in doing something terrible and unforgivable to our wonderful country.
We realize that we have given our children a legacy of bankruptcy. We have defrauded our country to get ourselves elected."