The bankers are betting that the money they were given by the feds will be worth less next year than it is this year. So they exchange it for everything and anything, confident that when it comes time to pay it back it will be even easier to come by than it is now.
So far the bet has gone their way. Copper has doubled. Gold is up 20%. Stocks markets all over the world are up 60%. Foreign currencies, too, have beaten the dollar.
Will the wager against the dollar continue to pay off? Well, that’s the big question. If so, you should stay in stocks, gold and commodities. If not, you should move to cash.
But it hardly matters to the gamblers. They’re playing with someone else’s money! If the bets go well, they pay themselves huge bonuses. If they go badly...well...hey...gimme a bailout!
But you can’t blame the bankers. They’re performing a very valuable service. They are helping to separate fools from their money. Too bad we taxpayers are the fools...
From a column in “Daily Reckoning”- ( www.dailyreckoning.com)
This clearly explains the ‘invaluable’ service bankers are doing to humanity and we should not grudge them their bonuses. After all, this is one instance where a small number of people make a huge difference to the entire universe.
Unfortunately, the world has chosen to ignore Shakespeare (Neither a lender nor a borrower be). In fact, at the heart of every banking led crises (I do not think there is any other kind) is debt. Straight debt, sovereign debt, packaged debt, re-packaged debt, microfinance scam, leasing scam, etc. The list is endless. Paper money ultimately is only paper. So long as we believe in the illusion, the world economic growth behaves as if it is on steroids. Without this illusion, probably, the developed world will be at a steady state (with zero growth) and the developing world will possibly struggle to remain in place because they will have no ‘currency’ of trust. Left to their own resources, the poor cousins in the world will become poorer. It is only the bankers who create this wonderful ‘feel good’ without any money, that the world is able to grow. We are also all stuck with America, whether we like it or not. The rich have their money in dollar. If you have a weak dollar, you become poorer. America dominates the world through its wonderful bankers. Even at the peak of the crisis, they made sure that the shrewdest banker was fattened with the flesh of the other bankers. So, don’t yet throw the banker away.
Cheers. Have a great day.