Contents
Page 1
Introduction
Financialisation
Page 2
UK – Banks, Corporations and Parliament
UK – Economic Troubles
Debt, Inflation and Economic Crisis
Page 3
Business Debt
Personal Debt
Implications
Page 4
Banks & Decentralisation
Local Banks and the German System
Credit Unions
Savings Banks
Page 5
FinTech
BitCoin
A Programme for Regeneration
Preface;
The Western world is faced with an oncoming financial melt-down. The only real argument amongst financiers and governments is whether it will be deflationary or inflationary and it looks like the latter.
There is little or no discussion about re-building the real economy where wealth is created. Most discussion is between financiers fighting over creamed off wealth and fought over by the finance sector.
I hope the following will help prompt a much overdue discussion. I have tried to keep it short so that people will have the time to read it. Under “Miscellaneous” I have tried to make clearer some points that are not usually included in a discussion on the economy.
Introduction
As UK debt balloons so do the fortunes of the ultra rich and the vast fortunes managed by the Mutual and Hedge Funds here and in the USA. The top ten US Mutual Funds dwarf all other financial companies. Blackrock has over $10 Trillion under management and the other top nine US funds all have over a Trillion under funds. The top Hedge Funds manage hundreds of Billions. This is where money ends up. The circular theory of income, always suspect, is now defunct.
It is almost necessary to treat the US and UK almost as one economy. The US funds own the controlling shares in almost all the top UK firms and three out of four of our biggest banks. Our banks and other institutions hold billions in US Treasury Bonds.
It is precisely the creation of debt by private banks that creates money and the never ending growth in money supply which ultimately ends up in the hands of these financial funds. Recently, in the last decade and in response to the Covid crisis, money has been given and loaned by the government to both companies and individuals both here and in the US. This will have an strong inflationary effect and cannot be continued without spurring inflation further.
The funds held by the Mutuals and Hedge Funds, instead of being used for investment and research, are used for speculation with commodities, currencies, bonds, shares and property: an ever increasing vortex of money chasing itself in circles, employing millions of people and achieving nothing except making the rich richer and sucking the wealth from the working and professional classes.
A recent development has been that these funds are heavily investing in China which they see as a safe haven compared to the USA, this despite the EverGrand crisis.
We live in a system which is increasingly contributing to massive wealth inequality and is increasingly unstable.
Financialisation
The incredible growth of financial corporations in the last few decades has led to a qualitative change in our economic system. This could not have happened without a ongoing process of “privatisation.” Privatised companies have gradually been snapped up by financial institutions.
The capitalism of old has gone due a process called financialisation. We are now in the era of “Finance Capital” or which some call “Feudal Capitalism.”
Over the last three or four decades US financial corporations have steadily bought up controlling shares in all the major corporations all over the Western World and increasingly in smaller ones and in property.
Instead of independent shops we have had the growth of corporate owned franchises with strings of identical shops dominating high streets.
Thus from top to bottom in the US/UK financial institutions, with terrifying amounts of money, dominate our economic system.
There is no doubt, with recent governments, they now dominate the political system as well. Cameron, May and Johnson all come from within the finance sphere. There is little doubt that Blair and Brown were also drawn in to that sphere of influence. The economic ideology of neo-liberalism is precisely that of the finance sector.
What is also disturbing is the growth of an ultra-rich financial class which owns and controls everything and is responsible to no one. The very antithesis of democracy.
The growth of financialisation has transformed productive capitalism into a form of parasitic financial capitalism in which shareholders have no function in the actual process of the production of goods and services. Our high streets are increasingly dominated by chain stores and franchises. Now even these are being overtaken by Online shopping and postal deliveries, themselves dominated by the likes of Amazon. What productive start-ups there are, are soon swallowed up by the multinational finance corporations.
Our society is divided into the ultra rich on one hand and the increasingly impoverished poor and working/professional classes on the other.
