Forum Post: Would the 1% allow a financial collapse?
Posted 11 years ago on May 31, 2012, 6:42 p.m. EST by alterorabolish1
(569)
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Thinking about the run on banks in Europe, the thought of a possible financial collapse seemed reasonably normal. Then it occured to me, a collapse will never happen unless huge masses of people lose confidence in the system. Those in charge of the system can and will prevent that at all costs. They can shore up any bank or country simply using computers, legally or not.
If a country is making payments on bonds or loans, someone is making profits from those payments. It would be in their interest to lend, (or give), money to those countries so that they could make the payments. If they can borrow this money to give to the countries at 0%, everything's fine.
This may go on for a long time.
Yes, they will create a global hyper-inflationary collapse. Now is the time to reinstate Glass-Steagall and create the firewall between banker debt and the real economy.
Petition for a New Glass-Steagall Act: http://act.boldprogressives.org/sign/sign_glasssteagall/?source=bp
The 1% are caught in a maelstrom of their own making.
The economic system has become so top-heavy that it must collapse. Too much wealth is concentrated at the top. For a while, through socialist (called by other names) policies, the lower class was given some security via legislated safety-net programs like unemployment insurance, Social Security, and Medicare.
Now, however, because greed knows no bounds, those same safety-net programs, which forestalled uprisings in the past, are in the process of being reduced and removed completely. This has occurred, I believe, because the 1% believe that modern technological warfare allows them to control the population with little risk to themselves.
Modern technologic warfare is everyone's biggest concern. Hopefully, the 1% doesn't have that power yet.
The economic system might be controlled for a long time with financial games. There is certainly evidence that it's happening now.
as long as they can short every stock out of existence and run off with all the money.....
Not true. The interest rates on bonds gets so high, the people in the country can't pay them back via enough taxes.
Heck, in Greece the population has stopped paying taxes and the Germans are saying FU, why should you retire at 50 when we have to work until we're 67.
It's NOT in their interest to lend. It's NOT in their interest to "give".
This statement is nonsense:
"It would be in their interest to lend, (or give), money to those countries so that they could make the payments. If they can borrow this money to give to the countries at 0%, everything's fine."
Someone is receiving the high interest rates from the bonds and they want that to continue. They certainly don't want a default and lose everything. Why not borrow at 0% or 1% and give the money to whoever is paying the high interest rate so that they can make the payment?
What bonds are giving high interest rates? Certainly not US bonds which are some of the largest in sales volume.
Spain and Italy are paying 6%.
Thanks. That is relatively high. The EU is falling apart. The individual economies of the various countries making the union up are way too varied to exist under just one currency. This is the main problem affecting the EU, and countries in difficulty now Spain, Italy, Portugal, and Greece. If they had their own currency much of the stress would be gone.
That's not the point. The point is you can promise the moon, but at some point, buyers stop believing you can really deliver.
Usually at a crash if history is any kind of teacher. The biggest fallacy is that we have to sell bonds at all to finance deficits.
I can promise you a 15% or 20% return. What if I really can't deliver? What if the numbers are so big, everyone knows you're FOS? Remember, bonds are long term (years, which is long term given the BS going on today and the changes and rioting on the ground day by day). Why would a bondholder or a potential buyer trust that?
Here. You really need to understand the math and economics behind what's going on:
http://globaleconomicanalysis.blogspot.com/2012/05/greece-public-finances-face-collapse-as.html
http://www.zerohedge.com
Zerohedge is always on point!!
Bonds are suppose to be long term, but are bought and sold every day.
Yes, but no one is going to believe you can really pay them back when news is coming out about how poor the real numbers are and you're a country threatening to leave the euro and change all your money over to another currency and voiding all previous debt.
The things bond buyers don't like is uncertainty, especially when you're asking them to invest in your country.