Silk Road forums
Discussion => Philosophy, Economics and Justice => Topic started by: d0nniedark0 on August 02, 2013, 05:25 am
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"Are the big banks really as powerful as some people say that they are? Do they really control the global economy? If y0u asked most people, they would tell you that governments control the global economy. But the campaigns of our politicians are funded by the ultra-wealthy, the big banks and the large corporations that they control. Others would tell you that the Federal Reserve and the rest of the central banks around the world control the global economy. But the truth is that the Federal Reserve was established by the bankers and for the benefit of the bankers. As you will see below, at the very core of the global economy there exists a “super-entity” of financial institutions that control an almost unimaginable amount of wealth and power. These financial institutions and the ultra-wealthy individuals behind them are really the ones that are pulling all the strings. In this world money equals power, and the borrower is the servant of the lender. When you follow the pyramid all the way to the top, it begins to become very clear who really is in control.
In business schools all over America today, instead of dreaming of starting new businesses and contributing something positive to society, most business students are dreaming of going to Wall Street and getting rich. But Wall Street doesn’t actually create or build anything of value for society. Instead, the bankers make most of their profits by essentially pushing money and paper around. In a recent article, Chris Martenson commented on this…
Today, some of the most celebrated individuals and institutions are ensconced within the financial industry; in banks, hedge funds, and private equity firms. Which is odd because none of these firms or individuals actually make anything, which society might point to as additive to our living standards. Instead, these financial magicians harvest value from the rest of society that has to work hard to produce real things of real value.
While the work they do is quite sophisticated and takes a lot of skill, very few of these firms direct capital to new efforts, new products, and new innovations. Instead they either trade in the secondary markets for equities, bonds, derivatives, and the like, which perform the ‘service’ of moving paper from one location to another while generating ‘profits.’ Or, in the case of banks, they create money out of thin air and lend it out – at interest of course.
But just because they aren’t adding much value to society does not mean that these big banks are not extremely powerful. In fact, anyone that underestimates that power of these monolithic financial institutions is being quite foolish.
A team of researchers at the Swiss Federal Institute of Technology in Zurich studied the relationships between 37 million companies and investors worldwide, and what they found was absolutely stunning.
What they discovered is that there is a “super-entity” of just 147 very tightly knit companies that controls 40 percent of the entire network…
When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.
So exactly who are the companies that are at the core of this “super-entity”?
Well, almost all of them are banks or financial institutions. The following is a list of the 50 “most connected” companies from the study, and the notes in parentheses are from Chris Martenson…
1. Barclays plc
2. Capital Group Companies Inc (Investment Management)
3. FMR Corporation (Financial Services)
4. AXA (Investments & Life Insurance)
5. State Street Corporation (Investment Management)
6. JP Morgan Chase & Co (Bank)
7. Legal & General Group plc (Investments & Life Insurance)
8. Vanguard Group Inc (Investment Management)
9. UBS AG (Bank)
10. Merrill Lynch & Co Inc (Bank)
11. Wellington Management Co LLP (Investment Management)
12. Deutsche Bank AG (Bank)
13. Franklin Resources Inc (Investment Management)
14. Credit Suisse Group (Bank)
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp (Bank)
17. Natixis (Investment Management)
18. Goldman Sachs Group Inc (Bank)
19. T Rowe Price Group Inc (Investment Management)
20. Legg Mason Inc (Investment Management)
21. Morgan Stanley (Bank)
22. Mitsubishi UFJ Financial Group Inc (Bank)
23. Northern Trust Corporation (Investment Management)
24. Société Générale (Bank)
25. Bank of America Corporation (Bank)
26. Lloyds TSB Group plc (Bank)
27. Invesco plc (Investment mgmt) 28. Allianz SE 29. TIAA (Investments & Insurance)
30. Old Mutual Public Limited Company (Investments & Insurance)
31. Aviva plc (Insurance)
32. Schroders plc (Investment Management)
33. Dodge & Cox (Investment Management)
34. Lehman Brothers Holdings Inc* (Bank)
35. Sun Life Financial Inc (Investments & Insurance)
36. Standard Life plc (Investments & Insurance)
37. CNCE
38. Nomura Holdings Inc (Investments and Financial Services)
39. The Depository Trust Company (Securities Depository)
40. Massachusetts Mutual Life Insurance
41. ING Groep NV (Bank, Investments & Insurance)
42. Brandes Investment Partners LP (Financial Services)
43. Unicredito Italiano SPA (Bank)
44. Deposit Insurance Corporation of Japan (Owns a lot of banks’ shares in Japan)
45. Vereniging Aegon (Investments & Insurance)
46. BNP Paribas (Bank)
47. Affiliated Managers Group Inc (Owns stakes in 27 money management firms)
48. Resona Holdings Inc (Banking Group in Japan)
49. Capital Group International Inc (Investments and Financial Services)
50. China Petrochemical Group Company
Are you starting to get the idea?
The global economy truly is completely dominated by banks and other financial institutions.
In the United States, the big banks are not just content to own other companies anymore. Now, some of our largest banks are actually starting to directly get into businesses such as “electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining”. The following is an excerpt from a letter that several members of the U.S. Congress recently sent to Federal Reserve Chairman Ben Bernanke…
We write in regards to the expansion of large banks into what had traditionally been non-financial commercial spheres. Specifically, we are concerned about how large banks have recently expanded their businesses into such fields as electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining.
Here are a few examples. Morgan Stanley imported 4 million barrels of oil and petroleum products into the United States in June, 2012. Goldman Sachs stores aluminum in vast warehouses in Detroit as well as serving as a commodities derivatives dealer. This “bank” is also expanding into the ownership and operation of airports, toll roads, and ports. JP Morgan markets electricity in California.
In other words, Goldman Sachs, JP Morgan, and Morgan Stanley are no longer just banks – they have effectively become oil companies, port and airport operators, commodities dealers, and electric utilities as well. This is causing unforeseen problems for the industrial sector of the economy. For example, Coca Cola has filed a complaint with the London Metal Exchange that Goldman Sachs was hoarding aluminum. JP Morgan is currently being probed by regulators for manipulating power prices in California, where the “bank” was marketing electricity from power plants it controlled. We don’t know what other price manipulation could be occurring due to potential informational advantages accruing to derivatives dealers who also market and sell commodities. The long shadow of Enron could loom in these activities.
You can read the rest of their letter right here.
This week, Goldman Sachs has been facing allegations that it has cost American consumers billions of dollars by manipulating the price of aluminum. The following is from an article that was posted on CNBC…
Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars.
The story of how this works begins in 27 industrial warehouses in the Detroit area where Goldman stores customers’ aluminum. Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again.
This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange, an investigation by The New York Times has found. The back–and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal. It also increases prices paid by manufacturers and consumers across the country.
If that sounds shady to you, that is because it is shady.
But as the big banks continue to gain even more power in our society, this kind of thing will become even more common.
So what can we do about it?
Not much.
Do you think that the media will tell us the truth about all of this? I wouldn’t count on it. At this point, there are just six giant media corporations that control more than 90 percent of the news and entertainment that you see on your television. And those six giant media corporations are very hesitant to do anything that will damage their corporate owners or their corporate advertisers.
Do you think that our politicians will do anything about all of this? I wouldn’t count on it. In national elections, the candidate that raises more money wins more than 80 percent of the time. Our politicians know where their bread is buttered, and as history has shown most of them are very good to the guys with the big checkbooks.
As I said at the top of this article, money is power, and according to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.
The global economy belongs to them. We are just living in it.
But hopefully if enough people start waking up, someday we will see some significant changes.
One of my favorite musical artists of all-time, Michael W. Smith, once wrote a song that contained the following lyrics…
Tell me, how long will we grovel at the feet of wealth and power?
Tell me, how long will we bow down to that golden calf, now?
(How long will be too long)
Will the people of the world ever get sick and tired of the overwhelming power of the big banks and start demanding changes?
That is a very good question. Please feel free to share what you think by posting a comment below…
http://www.realnews24.com/who-controls-the-global-economy-do-not-underestimate-the-power-of-the-big-banks/
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Reminds me of when I watched Zeitgeist years back.
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So from a libertarian perspective this is a step in the right direction, right? Instead of power being concentrated in the hands of governments which maintain their position through a monopoly on the use of force, and Mafia style protection money (or 'taxes' as they prefer to call it), power is slowly passing to private companies who maintain their position through economic competition in a free market?
I am of course playing that well known game Devils Advocate.
Meet the new boss......same as the old boss.
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No matter what your political views are, no one entity should have all that power.
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So from a libertarian perspective this is a step in the right direction, right? Instead of power being concentrated in the hands of governments which maintain their position through a monopoly on the use of force, and Mafia style protection money (or 'taxes' as they prefer to call it), power is slowly passing to private companies who maintain their position through economic competition in a free market?
I am of course playing that well known game Devils Advocate.
Meet the new boss......same as the old boss.
Actually in a libertarian world this would be much less likely to happen. Libertarians are more in favor of gold standard, and most are very against fiat money. One of the main things the banks do is fractional reserve banking, where they can loan out more money than they actually have. This is only made possible because of the government, and the only reason fiat currency has any value at all is because the government demands that taxes are paid in it. Libertarians are generally against the idea of taxation, which means they generally view fiat currency as being inherently worthless. In a libertarian society, a bank that loaned out more gold than it has would be considered to be engaging in fraud, and all of the fiat currencies in the world would be seen as about as valuable as toilet paper. Your biggest mistake is in thinking that these banks etc are operating in a free market, they certainly are not. In a free market Bitcoin would be able to compete with the Dollar much more so than it is now, there would not be regulations on money exchangers etc (ie: no know your customer), etc. So really you are not playing devils advocate against libertarians, because the only reason that these things are happening is because of the government and the lack of a free market.
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I am of course aware that we don't have a free market now.....please consider my whole previous post as falling under the 'devils advocate' umbrella.
Who will consider the bank to be engaging in fraud? The government? Its legal system? Under the gold standard gold will clearly have to increase vastly in value to 'underwrite' the economy. This is not automatically a problem. But who will keep most of the gold? The banks. They will then issue paper currency for day to day use. It has been typical throughout history for private banks (ie not government backed) to issue 10 times as much paper currency as gold reserves they hold. This is the origin of fractional reserve banking, and is pretty much the main function of banks. At the moment the government regulates banks and determines what ratio of lending to actual holdings a bank can engage in. (Of course in this instance it is fiat currency which is held in reserve, made as valuable as gold by government decree. Gold itself has little inherent value, unlike iron which can be used to make weapons etc. At least you can use paper money to wipe your bum with! Gold ultimately derives its value from what people think it is worth, this is determined on the world market. A fiat currency derives its value from what the world market thinks its issuing government s economy is worth. This is partly determined by banking institutions. If the international banking system has no confidence in a government it can fiat away as much as it likes, all it will do is inflate its currency and create worthless paper) Without government banks will still issue as much paper money as they think they can get away with. Fractional reserve banking will not vanish under gold standard.
There's an excellent bit at the start of Neal Stephensons "Cryptonomicon" where he describes Shanghai banks under conditions of hyperinflation keeping each other honest by hauling vast quantities of banknotes back to the issuing bank and demanding redemption in specie.
This works very well for small local private banks, competing with each other. Its not so clear that our current network of huge multinational banks could be relied upon to 'keep each other honest' in the absence of government oversight.
Let me be clear, with no government demanding taxes in fiat currency, and a gold standard, the huge multinational banks we now have will still engage in fractional reserve banking, and issue currency. I imagine perhaps theywill buy up all the bitcoins, and start issuing paper to 10x the value of those!
What I'm saying is that our current flawed system cannot be laid solely at the door of 'big government interfering with the free market'. "Big finance interfering with the free market" also is culpable.
In a society with no government, the larger a bank, the more trustworthy its currency will seem. It seems natural that under a free market monolithic financial institutions would dominate.
I think once again I'm heading back to the same point I always hit: Libertarianism....how do we get there from here? It doesn't seem like we can just say "OK GUYS FREE MARKET FROM NOW ON...3....2...1....GO!" when most of the worlds wealth is already in private hands.
If we have 100 acres of land and 100 gold pieces. You start the game with 99 of each and I have 1. We decide to play a few generations of "free market" Whose family will be working for who at the end of it?
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Actually in a libertarian world this would be much less likely to happen. Libertarians are more in favor of gold standard, and most are very against fiat money. One of the main things the banks do is fractional reserve banking, where they can loan out more money than they actually have. This is only made possible because of the government, and the only reason fiat currency has any value at all is because the government demands that taxes are paid in it. Libertarians are generally against the idea of taxation, which means they generally view fiat currency as being inherently worthless. In a libertarian society, a bank that loaned out more gold than it has would be considered to be engaging in fraud, and all of the fiat currencies in the world would be seen as about as valuable as toilet paper.
Just to be clear, are you proposing a strict gold standard? Where banks can literally only issue paper to the value of gold they hold? Surely not? Fractional reserve banking came about because it is extremely useful. It is possible for a bank to engage in it entirely alone, based on its customers confidence in its ability to meet its obligations. It is not inherently fraudulent. Nor does it need government backed fiat currency to work. Banks have been issuing many times more currency than holdings since the 17th century. Its something they can do completely independent of government backing.
Of course, at various points in history governments or more usually monarchs have become enraptured by the seemingly magical ability to print money to pay their debts and this is where many of the problems begin.
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I am of course aware that we don't have a free market now.....please consider my whole previous post as falling under the 'devils advocate' umbrella.
Who will consider the bank to be engaging in fraud? The government? Its legal system? Under the gold standard gold will clearly have to increase vastly in value to 'underwrite' the economy. This is not automatically a problem. But who will keep most of the gold? The banks. They will then issue paper currency for day to day use. It has been typical throughout history for private banks (ie not government backed) to issue 10 times as much paper currency as gold reserves they hold. This is the origin of fractional reserve banking, and is pretty much the main function of banks. At the moment the government regulates banks and determines what ratio of lending to actual holdings a bank can engage in. (Of course in this instance it is fiat currency which is held in reserve, made as valuable as gold by government decree. Gold itself has little inherent value, unlike iron which can be used to make weapons etc. At least you can use paper money to wipe your bum with! Gold ultimately derives its value from what people think it is worth, this is determined on the world market. A fiat currency derives its value from what the world market thinks its issuing government s economy is worth. This is partly determined by banking institutions. If the international banking system has no confidence in a government it can fiat away as much as it likes, all it will do is inflate its currency and create worthless paper) Without government banks will still issue as much paper money as they think they can get away with. Fractional reserve banking will not vanish under gold standard.
There's an excellent bit at the start of Neal Stephensons "Cryptonomicon" where he describes Shanghai banks under conditions of hyperinflation keeping each other honest by hauling vast quantities of banknotes back to the issuing bank and demanding redemption in specie.
This works very well for small local private banks, competing with each other. Its not so clear that our current network of huge multinational banks could be relied upon to 'keep each other honest' in the absence of government oversight.
Let me be clear, with no government demanding taxes in fiat currency, and a gold standard, the huge multinational banks we now have will still engage in fractional reserve banking, and issue currency. I imagine perhaps theywill buy up all the bitcoins, and start issuing paper to 10x the value of those!
What I'm saying is that our current flawed system cannot be laid solely at the door of 'big government interfering with the free market'. "Big finance interfering with the free market" also is culpable.
In a society with no government, the larger a bank, the more trustworthy its currency will seem. It seems natural that under a free market monolithic financial institutions would dominate.
I think once again I'm heading back to the same point I always hit: Libertarianism....how do we get there from here? It doesn't seem like we can just say "OK GUYS FREE MARKET FROM NOW ON...3....2...1....GO!" when most of the worlds wealth is already in private hands.
If we have 100 acres of land and 100 gold pieces. You start the game with 99 of each and I have 1. We decide to play a few generations of "free market" Whose family will be working for who at the end of it?
Good read. Kudos +1
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Actually in a libertarian world this would be much less likely to happen. Libertarians are more in favor of gold standard, and most are very against fiat money. One of the main things the banks do is fractional reserve banking, where they can loan out more money than they actually have. This is only made possible because of the government, and the only reason fiat currency has any value at all is because the government demands that taxes are paid in it. Libertarians are generally against the idea of taxation, which means they generally view fiat currency as being inherently worthless. In a libertarian society, a bank that loaned out more gold than it has would be considered to be engaging in fraud, and all of the fiat currencies in the world would be seen as about as valuable as toilet paper.
Just to be clear, are you proposing a strict gold standard? Where banks can literally only issue paper to the value of gold they hold? Surely not? Fractional reserve banking came about because it is extremely useful. It is possible for a bank to engage in it entirely alone, based on its customers confidence in its ability to meet its obligations. It is not inherently fraudulent. Nor does it need government backed fiat currency to work. Banks have been issuing many times more currency than holdings since the 17th century. Its something they can do completely independent of government backing.
Of course, at various points in history governments or more usually monarchs have become enraptured by the seemingly magical ability to print money to pay their debts and this is where many of the problems begin.
I am proposing a strict whatever the hell people want standard. People don't want money that has value because it is used to pay off the mafia. The dollar is only worth anything because taxes are paid in it. Fractional reserve banking is pretty close to inherently fraudulent. If you have 10 bars of gold how can you loan out 80 bars of gold? Banks have pretend money and it is used for them to make real money. If I write a check to the bank for 10 times more money than I have, and then I use the cash for investments, it is considered fraud right? So why can the bank give out 10 times more money than it actually has? The only reason it can is because the government says that it can. The bank makes money out of nothing and then gets rich from it. That wouldn't happen in a libertarian world, because nobody really wants pretend money, and you can't really loan out 80 bars of gold when you only have 10.
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What we have here is an outrage and injustice that has been going on in the banking sector since the S & L Crisis in the 1980's. Banking used to be a really boring job, run on the 3-6-3 Rule...3% interest on depositors accounts, lend money at 6%, and off to the golf course at 3pm. :P Bankers used to be solidly middle class, without exorbitant incomes. When our manufacturing base collapsed in the 80's and 90's...we saw the financial sector become a bigger part of the economy...up to 40% of the economy. Thanks to banking deregulations starting with the Clinton administration, and grossly incompetent policing on the part of the SEC and the Justice Department....we ended up with a housing bubble many people saw coming and the collapse of the economy in 2008. We still have not recovered from that. Thanks to Robert Rubin, Larry Summers, Alan Greenspan, etc. etc. who kept telling regulators to quit worrying about derivatives, and credit-default swaps...and all these arcane new-fangled ways for banks to make money on bad mortgages by betting against them (and then buying insurance to cover the eventual losses) the party came to a screeching halt in the fall of 2008...............these banks were playing fast and loose with the rules, hell, they WROTE the rules, because the financial chicanery they came up with was too complex for legislators to figure out. Remember Henry Paulson....one minute CEO of Goldman-Sachs the next minute Secretary of the Treasury during the financial meltdown? He let Lehmann Brothers go down b/c they were a competitor of his at Goldman. Remember TARP? All the billions, I mean trillions, of tax payer dollars given to these banks because they were "too big to fail?" These CEO's and bank big-wig's knew exactly what they were doing!!!! Not even a slap on the wrist. Has anyone gone to jail? Has anything changed? Bernie Madoff was a lone wolf who ran a small fry Ponzi scheme in comparison to these bank executives...........and the revolving door is just sickening.....one day you're the CEO of Citibank.. next day you're head of the SEC, who is supposed to be policing this stuff. The rule of law has been eroded in this country when it comes to our financial affairs...and I'm afraid we're heading for a bigger mess because Obama has done NOTHING to punish those who started this disaster. Now he's considering Larry Summers as the next Federal Reserve Chairman, after Ben Bernanke's term is done. If that doesn't want to make you puke, I don't know what will............and I've been a registered Democrat my whole life, but Obama's failure to throw anybody of consequence in jail or at least re-implement the Glass-Steagal Act and other regulations that were on the books to prevent these types of scenarios from happening will tarnish his name in the history books, no matter what good he does in other areas. The financial/banking system is one big con game...and the taxpayers are the suckers...as usual. Sorry, rant over. :-X
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Damned good question my brother, who controls earth and its economy?Can a human control it?Can a human soul or person of institute own it or any part?who goddamned control it?
Am i a part of the economy?are you?doesn´t every individual itself decide and change?
Damned where is the awareness nowadays....
Peace n Love
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@d0nniedark0
You are quite right, the concentration of power ensures the the ineterest of the "elites" or "one-percenters" will their enormous influence....money....to maintain the status quo. I do think however that we at the crossroads. Look at the uprisings around the world recently, from the "occupy" movement to events in middle east, turkey, brazil etc. Note the ferocity with which the established authorities have deployed disproportionate violence to quell its own citizens. People know things aren't heading in the right direction and the courageous actions of people like Bradley Manning and Snowden are highlighting the official lies and double standards of Govts, in particular the US.