Governments
continue to waste tax and state revenue to support the rotten
structure called "free market"
globinfo
freexchange
"As
long as the government does not intervene, I will sell" a
stockbroker recently commented on the fall of China's stock market.
He meant that he will selling stocks, bonds and other financial
products to trigger government intervention. Because he knows very
well that the government of China, like the government of any large
economy, sooner or later will shed those public funds are needed in
the market to buy stocks and bonds, to support the bubble markets and
avoid further decline of its stock market.
For although
the global debt has reached 200 trillion dollars, toxic financial
products ("derivatives") have surpassed 700 trillion
dollars, and real (production) global economy has fallen
significantly, the central banks of the world rely on distorted
statistics that indicate an upcoming "recovery." In most
cases, a more accurate term for these "statistics" would be
"lies". But governments continue to waste tax and state
revenue to support the rotten structure called "free market".
Especially
China has tried every possible way to support the stock market:
continuous funding injections, currency devaluation, buying market
shares from its gigantic state pension fund, and a reduction in
interest rates. The result, as the economic editor of the British
Channel 4 Paul Mason noted on twitter a few days ago, is that markets
are sinking, while the world understands that the main engine of
growth (China) is in the hands of an incompetent, secretive, police
state, which thinks that it can dictate the prices of shares.
And despite
all the interventions, the downward trend of the Chinese economy
continues through small short-lived rises and gains that quickly
evaporated. But China, not only is not an exception, but also due to
the size of its economy and the dependence of many states of their
commercial relations with it, it has acquired the role of pacemaker
for many "emerging" markets. As a result, the value of the
stock market of many countries that depended on exports of oil and
other raw materials to China, has dropped over 33% in the last year:
Indonesian and Malaysian by 37% and Brazilian by 51%.
However, the
international financial institutions regularly conduct cautious
optimism forecasts and focus their attention to the repayment of
relatively insignificant debt of Greece and other countries.
Such
optimistic forecasts do not constitute an oxymoron, since market
regulation is left to organizations like the Federal Reserve System
(Federal Reserve) and the ECB. Who would feel safe for the medicines
that buys if the organizations responsible for their supervision in
Greece (EOF), or Europe (EMA), or USA (FDA), were companies whose
shareholders were the major pharmaceutical industries and their
administrations consisted of executives of these industries?
Similarly, who can have confidence in large state or transnational
banks when their boards include current and former bankers? 5 out of
12 members of the most important committee of the Federal Reserve are
banking executives in active service, while two of the six members of
the Executive Board of the ECB were banking executives - Mario
Draghi, the managing director and vice president of Goldman Sachs,
and Peter Praet, chief economist at Fortis Bank.
But even
when the market regulation includes stringent rules, e.g. for the
control of dangerous "derivatives", the big banks will find
almost "invisible" windows to bypass each control: Reuters
revealed on August 21, that hundreds of transactions worth billions
of dollars of the 5 US big banks were "disappeared" by the
US markets and had been transferred to London, where market
regulation is more lenient for the bankers, to escape from the
corresponding controls. As noted by a former finance minister of
Cyprus, the big banks always manage to appear one step ahead of any
restrictions and control imposed on them. And this happens, even when
these controls and financial rules, were set up for the benefit of the
richest 1% of the population of the world, as the American Senator
Bernie Sanders noted last week.
Certainly,
any avoidance of banking control grows the bubble of the markets and
increases the risk to burst at any moment. Especially when most trade
exchanges are conducted automatically by computers with breakneck
speeds. When the bubble bursts, any banking step forward, no matter
how fast, will be a step into the void.
Article
by Michalis Gianneskis, translated from tvxs.gr
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