Four Horsemen Page #3

In some cases they have to take on debt,

just to afford things

they previously we're able to buy.

Which means they have to

go back to the banks.

In reality this process of creating money,

only redistributes wealth

from the bottom to the top of the pyramid.

And that's that ever increasing gulf

between the rich and poor

gets bigger and bigger and bigger.

When you get off the gold standard

and switch to FIAT,

combined with a fractional reserve

banking system,

you end up compounding debt

faster than you can ever

possibly produce to support that debt.

So eventually you're going to

find yourself in a debt slavery

and that's what's happening in the US.

For every dollar of GDP, you also

create some 5 dollars and 50 cents of debt.

This is what happens when the

economy flips over and basically capsizes.

The government solution now

is to create more debt.

You can never get enough of

a currency that doesn't work.

You can print it to kingdom comes.

You can't print wealth, and you can't

get out of debt by creating more debt.

If you could, Zimbabwe would be the largest

most prosperous country on the planet,

we know it doesn't work.

Of the money in the world today

97% is debt.

Voltaire once said: "All paper money eventually

returns to it's intrinsic value,

Zero!"

For three generations the world watched

the fight between capitalism and communism,

but in the 1980s the Russian economy

started to collapse.

The Soviet Union capitulated,

and "so called" capitalism reigned supreme.

Before 1989 we had a battle between

communism and the market.

And in that battle there was a sence of;

"Lets not expose the flaws in

the market economy".

This is too important of a battle that;

"you don't critisise our team

when fighting their team".

And their team; social with authoritarianism,

their failure to deliver

well being to their society...

It was very clear that if you had to

choose between these two,

which one was better.

Communism failed first,

for various reasons, it was inefficient,

human rights, lack of respect...

Capitalism was continuing in a triumphant mode,

"Our adversary has failed

therfore we have done everything right"

Both systems are trying to do something

which is fundamentally impossible

grow forever...

And they are both going to fail, one fails first.

Capitalism is going to fail later, or even now.

America now is in an interresting position.

In the past 2-300 years of it's history,

it's a culture and country which

has always existed on

the assumption that

the resources could be expanded.

If there was a problem,

you always try to do it by expanding the pie

go west, make the pie bigger...

...so that everyones got a bigger piece.

Now it's facing a world where possibly

resources are being more constrained.

It's going to have to divide all that pie

and inflict pain on people.

That's something which it's

not well prepared for.

How has the country moved so far from

the intentions of it's founding fathers?

How has the American Dream

become so distorted?

Over the last 30-40 years,

capitalism has taken this extreme form

and a lot of it goes back to the economist

Milton Friedman from the chicago school.

Ronald Reagan and Margret Thatcher

and others buying in to these policies

They really encouraged people

to take on huge amounts of debt

encouraged privatisation,

smaller governments, and bigger military.

It's about deregulation;

getting rid of rules that govern

the people who run our institutions

Especially our corporations.

It's as though we're suddenly supposed

to believe that human beings that sit

at the top of corporations

don't need to be regulated,

that they're some sort of Gods.

Milton Friedman; his protges,

the Chicago Boys and the neoclassical ideology

beat the classical approach to

economics and became the framework

for what we today call capitalism.

There are 2 main competing economic

approaches, which determine how

humans manage the world and

distribute the wealth.

These are the classical and

neoclassical schools.

The classical school favours

less government interference,

more personal autonomy

and recognises that humans cannot

function without natural resources

The neoclassical school which has a

more dissmissive view of natural resources

thinks government should rule the economy,

solve social problems and

leave the free market to

look after the distribution of wealth.

The neoclassical school emerged

around 100 years ago

due to vested interrests desire

to protect their assets.

This ment that neoclassical mathematical

models and assumptions

we're divorced from reality.

They're based on what ought to be, instead of the

classical model which are based on what actually is.

It's these neoclassical models

which favour large corporations,

that have been used to legitimise the

financialisation of the global econonomy,

Championed by Reagan and Thatcher, neoclassical

economics still dominates policy making today.

The Reagan/Thatcher Revolution,

was a big change of powerstructure

and a big transfer of opportunity and wealth.

It's not that the poor gave to the rich,

it was a transfer within the wealth.

So the financial sector in the US,

UK and other places

became vastly more profitable

and wages in that sector went up a lot.

We would focus on bonuses

but also base salaries went up.

So it's a transfer from the non-financial

to the financial part of the economy.

That is unprecedented as far as we can see

in any of the available data to us.

I'm talking of all the recorded human history.

In 1932, in the aftermath of Americas

stock market crash,

a piece of legislation was passed

to protect society.

The Glass Steagall Act was introduced to

separate ordinary highstreet banking from

investment banking.

67 years later in 1999 under the influence

of treasury secretary Larry Summers and

his predecessor Robert Rubin,president

Bill Clinton repealed the Glass Steagall Act,

once again banks could take

ordinary depositors money and

speculate with it on virtually anything they liked.

Wall street has become a very

particular type of Casino...

Unfortunately not the kind we have in Las Vegas...

It is a Casino that has massive negative

repercussions on the rest of society.

It's not just loosing your money

on a few wild nights,

it's about the way those

organisations loose their money and thus

impacting the whole of society,

leading to massive losses of jobs.

This unfettered gambling pushed the entire

global financial system to near collapse

with balances and debt obligations

larger than the GDP of entire countries.

The banks had become to big to fail,

the west was unprepared,

and bankers met their railing and

desoriented governments.

"You have to bail us out!"

"If you don't give us the money

the whole thing goes down".

"What are you going to do with

millions and tens of millions of people

who have lost everything in

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