The Biggest Ponzi in Human History

[Raúl Ilargi Meijer]

Jean-Léon Gérôme Slave market 1866   Here’s the story in a nutshell: Ultra low interest rates mark a shift away from people’s wealth residing in
[See the full post at: The Biggest Ponzi in Human History]

[tc06rtw]

 “ … will have moved to some street with no name in a land far away. ”
 
I keep LOOKING for one, but I can’t FIND it!!
 
 

[Ken Barrows]

And I thought the biggest bubble in history was cryptocurrencies. Or Tesla. Or Amazon. As a commenter on another blog said (paraphrase), if the system cannot create more stuff, then creating more money/debt is a dandy substitute for some people.

[Nassim]

Who needs slaves these days? Guys like Harvey Weinstein get them for free. The idea that he is a bad apple is hilarious. Hollywood has always been like that. Ask Charlie Chaplin.

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Harvey Weinstein now has 93 accusers, 13 of them alleging rape

The sad thing is that all these women knew that there was a price to be paid to become a celebrity. Doubtless, he used force with some of them but the vast majority (most of whom have not come forward) accepted it as the ticket price.

[SteveB]

It’s not “genius”, it’s just the result of an infinite number of monkeys banging away on an infinite number of typewriters–in other words, it’s inevitable (in an exchange-based culture).

[bluebird]

Many people don’t buy a house, or even a vehicle, to own it. People buy a payment that they can afford now and rarely think long-term of the total costs involved. Mortgage debt, car loans, credit card balances are not anything to be worried. It’s about making the payments on all that stuff every month. I know some people who appear middle class wealthy, but actually are not even making ends meet paycheck to paycheck. The biggest Ponzi in human history, the everything bubble.

[Dr. D]

What will happen? As you point out, if prices fall, everyone will be underwater and uncollateralized, and the system will collapse, the rich lose money.

So that won’t happen.

On the other hand, wages could rise, taking their higher pay from the rich and unprecedented corporate profits.

So that won’t happen.

But if your standard currency collapses in confidence with rising interest rates, you have massive inflation, banks remain collateralized, the rich can hide in inflation assets, and real wages fall.

But with lower wages, who will be left own the houses and rentals? Same people who do now: the rich. They’ve all been bought by BlackRock, foreign investors, and Hedge Funds. And the wage earners will then own nothing, even less than they do now.

So what do YOU think will happen?

Now if only we could own and issue the new currency when we destroy the old currency, that’d be jake. Ripple, anyone?

[₿oogaloo]

Dr D, I think you are close, but a little off the bullseye.

If prices fall, triggering a wave of defaults and triggering a cycle that grinds lower and lower, the rich do in fact lose money. They lose money but they do not lose power. Some of them get wiped out if they were leveraged, but there are enough unleveraged players that they will never all be wiped out in the first leg down. They are losing money, they get defensive, they start making phone calls to get the government and the central bank to do something to save the system. And that’s exactly what the banks want. The last thing the banks want is a growing pile of collatral with no buyers to buy their stuff. Defaults at the margin is one thing. Massive system wide defaults are completely different. This can never be allowed to happen. Deflationists believe it is inevitable. Those who understand the underlying power structure understand that this will never be allowed to happen. They will destroy the currency before they allow it to happen, because at least nominally that keeps the system alive. And that allows the rich to point the finger at governments and central banks.

At the end of the day, the rich will still be rich. They will believe that they made great sacrifices and suffered greatly, but they will still be rich.

[Author]

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