The World’s Economy Will Collapse

If you are a self-funded retiree relying on interests for your income, you are currently earning zero, or very close to it. If you are an average worker and have savings in the bank, your money is helping the rich to get richer.

So what is going on?

Cheap money is going wild. Interest rates are close to zero. A saving’s account will earn you ridiculously low interest. The low interest rate is benefiting those who want to borrow to buy properties. The virtual auction system created by cheap money drives prices up, including the rental market. Young families can no longer afford to buy a home.

Billionaires are buying expensive inner-city properties that are often left empty, pushing the millionaires further out of town and in turn, pricing the middle class out of ownership. Sadly, some of the most vulnerable in our society can no longer afford to rent and end up homeless. That’s the slippery slope created by easy money.

In London, 40,000 expensive properties are owned by offshore shell companies that are a front for faceless billionaires. The very rich are paying big money for the best real estate. This scenario is repeated in the United States, France, Germany, Australia and every other wealthy country. The foreign buyers are mostly from the former Soviet Union, India or China, and organised crime is also getting in on the action. They are not just buying properties, they are buying the farms that feed you, the utility companies that provide you with electricity, gas and water, the ports and airports through which goods transit.

Inflation is poking its ugly head everywhere around the world. Consumers have to pay more for the basics but interests from their savings no longer offset the increased cost of living. People are not getting ahead in life, they are sliding backwards, priced out of a silly game of fake money.

The rich are getting richer by borrowing huge amounts of virtually free money. They leverage this money off their existing assets. It is not just the rich who are benefiting. Entire countries that should be bankrupt by now are able to remain solvent by borrowing huge sums. As long as the cost of money is close to zero, this little game will continue until the bubble bursts.

Large corporations are borrowing from each other and are in turn lending to each other. They use the money to make more money in what is essentially short-term gambling operations. This cannot go on forever. In some sectors, corporations make more money from speculation than from production. They put up 1/6th of the purchase price of another business, they borrow 5/6th and a couple of years later, they sell the asset at 800% profit. Why would you bother making canned lentils when you can make insane profits by buying and selling other canneries? Capital is no longer used to promote growth via increased production. It creates illusory capital.

There is a point where the false economy will catch up with everyone. The financial sector is busy making money off phantom money that does not come from producing anything. Speculation is fast becoming the most prolific industry in the world. The merry go round of fake money looks good on paper but in reality, it is a cancer on modern society and it will end capitalism as we know it.

Just like the global financial crisis of 2008 did, the middle class will be hardest hit while large corporations will be rescued by taxpayer money. We are edging closer to a socialist system where the welfare recipients are the corporations owned by the very billionaires who are responsible for the crash. Sympathetic politicians are watering down regulations in exchange for cosy jobs in the private sector, working for the predatorial crooks they were supposed to regulate. You will never stop bad behaviour as long as it is rewarded.

Someone asked “what is the solution?”

The solution is for speculation to be taxed, not in any one country but right around the world and at the same time.

The money raised by taxing all speculatory transactions should be saved, ready to inject into the new economy when the old one collapses.

Trillions of dollars can be raised, ready to save what needs to be saved and hopefully a lot of banks and financial institutions can go under. They are leeches sucking our blood. We need less bums speculating in front of computers and more people sowing wheat.