# Failure of Capitalism in One Report



## sags (May 15, 2010)

The latest Oxfam report is out and wealth disparity continues to grow more rapidly than expected.

Interesting that the number of super-rich has continued to fall. Regular folks got nothing left to take and they are eating each other now.

The super-rich used to number 338. Now there are 62 who control more wealth than the bottom 50% population of the world.

The top 1% have more wealth than the other 99% of the world combined.

http://www.reuters.com/article/us-davos-meeting-divisions-idUSKCN0UW007


----------



## sags (May 15, 2010)

The consequences are becoming self evident.

Social upheaval around the world. People like Donald Trump leading the GOP. Governments being removed. 

People will use the ballot box first, and if that doesn't work........................?


----------



## sags (May 15, 2010)

The Chairman of the OECD review committee says the current situation is worse than the 2007 financial crisis and "epic" bankruptcies are coming.

European banks had already admitted they are holding over $1 Trillion dollars worth of non-performing loans, and extrapolating that across all countries, banks and various lenders and the problem of non performing loans would be of Biblical epic proportions.

He is talking about "debt jubilees" as an orderly process to relieve people of debt. People with paper assets are going to be big losers.

_Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief," he said.
"It will become obvious in the next recession that *many of these debts will never be serviced or repaid*, and this will be uncomfortable for a lot of people who think they own assets that are worth something," he told The Telegraph on the eve of the World Economic Forum in Davos.

"The only question is whether we are able to look reality in the eye and* face what is coming in an orderly fashion*, or whether it will be disorderly. *Debt jubilees have been going on for 5,000 years*, as far back as the Sumerians."_

http://www.telegraph.co.uk/finance/...debt-defaults-fears-central-bank-veteran.html

Edit...........Mr. White is not a flaky doomsayer blogger. He is well respected among the world's central bankers and financial leaders.

_William White, the Swiss-based chairman of the OECD's review committee and former chief economist of the Bank for International Settlements (BIS)._

_Mr White, was also chief author of G30's recent report on the post-crisis future of central banking_


----------



## Rusty O'Toole (Feb 1, 2012)

What a joke. Capitalism ended a long time ago, what we have now is a combination of government and big business cooperating at the expense of the little people. Call it fascism, kleptocracy, oligarchy or what you will but it's not capitalism.

The money owed by governments, government backed enterprises, central banks and big banks with government connections account for practically all of the debt. It will never be paid back, it can't be paid back and it won't be paid back. But before you start worrying about who will lose when the debt gets wiped out you might ask who got the money? The bailed out bankers aren't satisfied with 200 foot yachts anymore, they are buying private islands. Yet a few years ago they were facing ruin and imprisonment for their crimes. But somehow they got bailed out, all their illegal and uncollectable debts paid off in full and no one went to jail or even got fined.

As for who will lose when the debt gets wiped out, who do you think? Hint: It won't be the bankers or government enablers excuse me, regulator. It will be the taxpayers again. They already put the 'bail in' provision in place to let them clean out your bank account anytime they need it. As soon as they finish wiping out the boomers' retirement accounts that will be next.


----------



## sags (May 15, 2010)

Yes, the article talks about "bail in" provisions, and we have had some discussions on that on CMF.

I agree with the concept that if they aren't needed and would never be used, they wouldn't have bothered including them in regulations.


----------



## Eclectic12 (Oct 20, 2010)

sags said:


> ... I agree with the concept that if they aren't needed and would never be used, they wouldn't have bothered including them in regulations.


???

You don't think having the ability to react, if needed ... won't be a benefit & confidence builder?




> Honey .... I know we won't need an electrical generator for an extended power outage ... trust me.


versus



> Honey ... the generator is in place, we are ready if it is needed.



I know which one my mom had more confidence in.


Cheers


----------



## Pluto (Sep 12, 2013)

I'm in favour of capitalism unless someone has a better alternative. Not unfettered capitalism, mind you. 

When one looks at what communist USSR and China did - essentially made almost everyone poverty stricken - its obvious state owned means of production, and no profit permitted, is not viable.


----------



## sags (May 15, 2010)

Eclectic12 said:


> ???
> 
> You don't think having the ability to react, if needed ... won't be a benefit & confidence builder?
> 
> ...


Or another way of looking at it..........the government comes along and says we are going to put a lien against the equity in your house. 

Don't worry......we don't plan on ever having to use it, but we want it there just in case we do.


----------



## dogcom (May 23, 2009)

Or how about this one a little over a year ago when JP Morgan pushed to have saving accounts back the bad bets banks make.

http://www.truthdig.com/eartothegro..._jp_morgans_ceo_your_savings_account_20141214

The whole system is lawless and the market completely rigged. This is not capitalism at all and I agree with what Rusty said.


----------



## sags (May 15, 2010)

It was nice to see that the people I have the most respect for in US politics voted against that, although their efforts were fruitless and big money prevailed.

Carl Levine, Elizabeth Warren, Maxine Waters, Bernie Sanders and Nancy Pelosi among them.

Obama is a complete disappointment. He is nothing more than a cardboard cutout reciting whatever the bankers tell him to say, just like that video that shows Donald Regan telling President Reagan to "speed it up". 

https://www.youtube.com/watch?v=T2zLt-tdf1M

I would say his election has to rank right up there with the greatest cons of all time.

If we wonder how he rose to President as a first term Senator.............we soon found out. He was bought and paid for by the political machine and offered as an "alternative" to what people didn't want.

The wealthy elite are smart. They know that people are angry and looking to elect someone who isn't owned by the banks. So they prop up somebody for the people as a straw man choice.

One wonders if Donald Trump falls into the same category. Despite what he says now, he has never been known as caring a whole lot about average people.


----------



## lonewolf (Jun 12, 2012)

The latest interest rate hike is a sign the fed is out of bullets. Money will come in from countries with negative interest rates keep the system going a little longer then the bail ins. The Clintons are largely responsiblefor transactonal banking (bundled up loans then sold off) yet Hilary is like a god to a lot of American citizens. We need to get back to relationship banking where the bank can not bundle up bogus loans & sell them off.


----------



## dogcom (May 23, 2009)

Sags your right that maybe Trump will go the banker way once elected. We go through market turmoils every decade and if it hits when Trump is in the crisis that follows may need to be fixed once again by the same bankers who caused it. So Trump will need to shelf all the election promises and so on and go with the fix in order to save the economy.


----------



## Rusty O'Toole (Feb 1, 2012)

Eclectic12 said:


> ???
> 
> You don't think having the ability to react, if needed ... won't be a benefit & confidence builder?
> 
> ...


You seem to feel the bail in provisions should give the public confidence in financial institutions. Nothing could be further from the truth. The bail in provision has the opposite effect. In the first place it gives the banks the right to take depositors' money if they feel they need it. In the second place giving banks this kind of safety net only encourages them to ignore prudent policies in favor of riskier ones.

Being told the banks no longer hold my money in trust, but have the right to take it and use it as their own is not a confidence builder for me. I no longer keep money in a bank account that I can't afford to lose. Just the opposite of what a bank account used to mean.


----------



## Hawkdog (Oct 26, 2012)

Good essay here by Jim Rickards on capitalism

http://www.ecfr.eu/publications/summary/connectivity_wars_5064


----------



## mordko (Jan 23, 2016)

*Milton Friedman*

... said something like "the fall of communism does not represent victory of the western form of democracy. It's just that it's falling slower because it is still supported by elements of capitalism". 

Not the exact quote, but should be close.


----------



## Rusty O'Toole (Feb 1, 2012)

I'll tell you what would give me confidence in the banks. A return to the system we had a few years ago. The one where financial institutions were audited by government regulators and where a bank whose liabilities exceeded its assets, even by $1, was shut down at once and the money distributed to the depositors and any shortfall made up by insurance.

And any bank employee or executive who played fast and loose with someone else's money would be arrested, tried, convicted and jailed and would never be allowed to work in the financial industry for the rest of their lives.

In those days they had an incentive to avoid risk and make money the old fashioned way - by earning it rather than speculating. 

These days their motto seems to be, if it's too good to be true we want in on it. Bad loans and derivatives have blown up in their face before and will again. As long as the taxpayers keep bailing them out there is no reason for them not risk billions on the spin of the wheel or the turn of a lucky card.


----------



## bass player (Jan 27, 2016)

No one who writes about the failure of capitalism has ever done so as one of the 99% in a non-capitalist country.


----------



## MrMatt (Dec 21, 2011)

sags said:


> The latest Oxfam report is out and wealth disparity continues to grow more rapidly than expected.
> 
> Interesting that the number of super-rich has continued to fall. Regular folks got nothing left to take and they are eating each other now.
> 
> ...



It's interesting, people talk about how much the super rich have, but look at the life of the average person in a mostly capitalist country. It's pretty damn good.
Capitalism in western democracies for all it's faults has brought incredible improvements to quality of life for most people at all levels.

Capitalism has raised some boats higher than others, but we're all benefitting.

Also, nobody has proposed a system which actually works better, just like democracy, it's a crappy system, but the best one we've thought of so far. All these complainers haven't ever actually put forth a real solution other than take away the rich peoples money.
I work harder to get ahead, take away that incentive and what's the point?


----------



## sags (May 15, 2010)

I agree, but the rising tide has slowed to a trickle and may be on the verge of reversing as an increasing % of net income and wealth flows to fewer and fewer people.

People work harder to get ahead, and the danger is that unless there is sufficient reward for the effort, there will be no benefit to working hard.

If a river (income) flows into a pond (wealth) and the pond is getting bigger despite fewer people living around it........how long will the people on the river watch it flow by them while they work with diminishing rewards ?

The idea is to restrict the river flow into the pond, so that it is shared by more people living on the banks of the river..............rather than the few living around the pond.


----------



## donald (Apr 18, 2011)

That will never happen imo Sags
Whoever 'controls' the group(insert-government)
can never achieve this
soon than later a 'jim jones' is going to appear 
You can't cut out any of the seven sins

Wouldn't everytime you collect people(or new people)
how would you find the 'physcopath'?(budding one)
You won't because he will be the same leader of every start up and reconstruction of the new group?


----------

