Economics and Government and Politics and Social Issues13 Oct 2015 07:14 pm

Wealth is not so much about how much money and assets you have but rather how much money and assets you have in comparison to others. In essence, wealth is about how big of a piece of the pie you possess.

The recent money printing mania of central banks has deeply distorted our concept of wealth. Over the last decade or so the size of the pie (money pool) has quintupled yet the majority of people’s wages and assets have stagnated or have grown at a moderate pace.

What this means is that if you’re personal wealth hasn’t ballooned by 500% over the last decade your relative wealth has decreased. If your savings have stayed pretty much the same it means that you are 1/5 as wealthy as you were a decade ago. Actually if one figures in the rise in inflation of food, energy, medical care and other necessities your wealth has plummeted even if your numerical wealth has doubled or even tripled.

Economic data suggests that as many as 20% of US citizens were experiencing expanding relative wealth in the early 80’s. Those treading water or enjoying a larger share of the pie fell to under 10% within a decade. The next decade saw the percentage of people’s wealth increasing drop to 5% and then down to 2%. Since the last financial crisis in 2008, the percentage of people enjoying a boost in relative wealth has gone from the infamous “one percent” to a fraction approaching 1/10 of one percent.

So even in the glory days of the middle class well over 50% of US citizens were experiencing a decline in relative wealth. Yet, due to advances in medicine and technology statistics supported the idea that the US and European middle class were experiencing a rise in their quality of life.

The standard of living and quality of life of a sizable percentage of people can actually rise even while their relative wealth declines. This can occur due to substantial improvements in technology and medicine along with the empire sharing the spoils with its citizens. The US shared the wealth it obtained through global dominance with its allies and citizens. Consumer based capitalism rewarded its citizens and foreign backers and participants with increased access to its riches, even as the percentage of wealth continued to shift into fewer and fewer hands.

Yet, over the last couple of decades and especially since the last financial crisis the tendency for the US government and financial elite to share the bounty is on the decline. A consumer based society needed a sizable portion of the populace to participate as consumers and producers of goods and services and also to function as soldiers to insure the continued expansion of global domination (both militarily and economically).

Recent economic events and technological advances have now lessened the need for a sizable portion of US citizens to be consumers, producers and soldiers. Our vaunted consumer based society is now being replaced by a financial instrument economy. Please read my previous post http://guidoworld.com/blog/the-post-indu… to gain a better understanding of the logistics of this new economy and how it frees the financial elite from its dependency on US citizens for its continued progress and success.

The US’s position as the reigning superpower is dependent on its retaining its financial and military domination. Any set back in its relative wealth is a threat to its privileged and dominating position. The US cannot just maintain its wealth to insure its dominance, but it must continue to increase its market share and piece of the global economic pie. Any drop in the percentage of global wealth it experiences results in a loss of global dominance. Wherever money and asset ownership exists, the US “cannot afford” not to participate and be a leader.

In order to remain the dominant superpower our government and its patrons must do everything in their power to maximize profits. One does not maximize profits through just tolerating and taxing lucrative illegal or immoral practices and markets. In order to maximize profits it is logically necessary to not only participate and establish a presence in economic boons such as black market trade, but to establish and maintain a commanding position. Likewise, one does not remain the dominant economic superpower by refusing to participate in the largest and most lucrative industries and marketplaces due to ethics and morals.

When one’s goal is an ever increasing state of wealth through maximizing profits and increasing market share it becomes imperative that you maintain access to “free markets” and that you dominate all lucrative marketplaces available. The bulk of our military actions make sense when viewed from this perspective. We go to war, use economic sanctions and intervene in the political world of other nations (regime change) all in an effort to gain access to potentially lucrative resources and markets or to establish a dominant position in an industry.

So while we trumpeted our defense of democracy and values such as freedom, in reality our privileged position was acquired and is maintained by the expanding acquisition and ownership of assets, resources and money. Britain in its heyday did not shy away from admitting that it went to war with China over the free trade of opium as well as other producing promising great profits.

Modern empires have used piracy, bullying, intimidation, manipulation and deception in order to acquire and maintain the monopolization of assets and resources. Nations which refused to participate were demonized, punished and often vanquished, whatever it took to increase market share and profits. The US has not deviated from this game plan, even if they try to hide this reality. When US leaders speak of taking aggressive actions against other nations to protect US interests, stakes and way of life it is far more accurate than when they say they are defending freedom and democracy. Unless, of course, they are referring to the freedom of gaining access and control of the assets and resources of others and that when they say democracy they mean capitalism (as our way of life).

We have generally opposed anyone who refused to participate in our exploitive profit based global economy or who wished to share the wealth with its citizenry. We labeled and demonized anyone behaving in this way as being a communist, socialist, terrorist, or as an evil and destructive zealot. A nation who nationalized its oil or attempted to use its resources to benefit its citizens while isolating itself from the US was sure to be invaded, attacked, have its government removed or have their assets frozen and be saddled with economic sanctions.

In general there are two basic national or cultural camps which resist or refuse to participate in “our (capitalistic) way of life” or prevent us from gaining access to their assets and resources. One camp would include any society promoting an egalitarianism such as socialists and communists. The second camp would be those who object to capitalism because of core values such as conservative religions and social activists. Most major religions have basic tenets which promote charity, succor and support to the less fortunate and are generally intolerant of exploitive and selfish economic practices. The very same practices which are often viewed as being inherent in the capitalistic free market system. A subset of these two camps would include entities such as human rights organizations, workers unions, and ecological watchdogs.

Luckily for the US many communists nations went the route of totalitarianism or were able to be guided in that direction which validated our aggressive actions as well as our claims of their being evil and our intentions as being noble. Yet, the social benefits of revolutionaries of the people such as Castro, Chavez and Gaddafi had to be ignored and vilified. Statistics which show great strides made in health care, education, access to technology, quality of life and quality of life are ignored, denied or described as meaningless is comparison to the suffering supposedly caused by these “evil tyrants”. Likewise the leaders of passive resistance and their themes of charity and non exploitation were undermined and labeled terrorists by our government (at least internally). This list would include Mandela, Gandhi, Dr. Martin Luther King as well as many prominent women’s rights and peace advocates.

We have forced our way into every marketplace and resource. Where ever money is made we are there, and we must gain monetary control. We can’t let our morals, ideals and principles be our undoing. While we may deny it, more and more people accept the fact that we go to war to maintain our economic leadership in oil, natural gas and other vital and profitable areas regarding energy. Yet, how long would we stay the economic superpower if our morality and principles prevented us from the billions of dollars available through the selling of munitions, illegal arms and weapons of mass destruction.

Communist nations are by definition opposed to profit based capitalism. So, when a nation becomes communistic or socialistic they no longer conduct themselves in a manner befitting global trade maximizing profit. The US reacts to this non participation aggressively and will go to war, support a coup or try to assassinate leaders who are deemed responsible for this unacceptable economic stance.

Yet, China is currently an example of how even a communist nation can be acceptable to us as long as they keep the channels of commerce open and allow us to exploit their riches in an expanding fashion. Tensions arise whenever China makes a policy decision which jeopardizes are financial role or shows any signs of hoarding their wealth or resources.

During its heyday Britain could not pass on the opportunity to dominate the opium trade. Its status as reigning empire necessitated its gaining access and control of the opium trade. When China successfully intervened and squashed the drug trade and addiction rate in its country, Britain felt it war worthy to reestablish the opium trade.

Just as Britain went to war for opium, the reasons behind our wars and military interventions are economic in origin. As mentioned above, our position as global superpower is dependent on not only maintaining but increasing our market share and piece of the global economic pie. Wherever a sizable market exists we must not only participate in it, but be an increasingly major player.

Vietnam and the surrounding area was known as the “golden triangle” and was responsible for much of the global production of heroin and other illegal “recreational” drugs. When the communists took over the flow of drugs began to slow down, and moral and health concerns became more important than economic ones. The US war in Vietnam succeeded in reestablishing the global drug trade. So, from a strictly economic standpoint the war in Vietnam was a success.

It is fascinating to note that the two longest wars for the US, that being Vietnam and Afghanistan are both illegal drug havens. Over 90% of poppy production evaporated when the Taliban took over and gained control of the land. As soon as the US got involved the poppy production not only returned but went to record levels. The charts of US military presence in Afghanistan and poppy production appear to be the same. Whenever our presence increases so does poppy production and global heroin trade, and when we leave or lose territory to the Taliban the production is curtailed.

While both Vietnam and Afghanistan could just be coincidences it does seem unlikely. We are a capitalistic society that values money, wealth and power over everything else. It is only logical that our policies and behaviors would correspond to this paramount concern. If we didn’t act in this manner than what other explanation is there for how we successfully maintain and increase our economic position. Someone is making the billions of dollars available through illegal drugs, munitions, armaments, pharmaceuticals, tobacco, gambling, prostitution, human slave trade, ecologically destructive practices, etc. and if the US government and its corporate sponsors aren’t leading the way then how do we remain the world economic power?

One only need to look at how we have exploited Central America and “banana republics” to get a picture of how important it is to the US to become and stay dominant in every market place and economic space. I saw an article recently that went through every war the US has participated in since its inception. As it turns out we have been involved in a military conflict or war in over 93% of the time we have been a nation. We have initiated the vast majority of these wars and conflicts.

The above statistic clears demonstrates that the US is more than willing to go to war to “protect our interests”, or to provide us access to and control of global assets. Yet, war is not the only means by which the US accomplishes these goals. Another fruitful means has been through the installation of trading agreements and international pacts of commerce. Agreements such as NAFTA (North American Free Trade Agreement) have been very effective in terms of protecting the rights of major corporations and industries such as banking, pharmaceutical, insurance and oil while expanding their access to foreign markets and assets.

Another tool has been to provide monies in loans and aid to foreign nations in exchange for establishing a military presence and gaining access to industries. Oftentimes the debt on the substantial loans given to nations become unserviceable resulting in our government and corporations gaining ownership of assets in exchange for forgiveness of debt. Many of the US’s most dominant positions have been forged through this method. The US gains ownership of foreign land, oil, coffee, plantations, gold, diamonds and many other lucrative markets via the exchange of assets for debt. Recently the EU took ownership of many of Greece’s assets and land in this same way of debt forgiveness.

While the practice of overwhelming a nation with debt could be just financial incompetence by bodies such as the International Monetary Fund (IMF) and the World Bank its frequency and obvious benefits to the goal of maximizing profits suggest otherwise. As early as 2002 I started to become concerned that the methods of confiscating assets through the creation of unserviceable debt had become a domestic issue with the US middle class being the target audience. The quick growth in credit card, mortgage and student debt of the average US citizen was becoming large and conspicuous. Loans were being given out at an alarming rate, and from my seat a good portion seemed unserviceable or very vulnerable to an economic downturn (such as the housing bubble).

Please click on the following link to read my thoughts on this perspective which I published in August of 2008 http://guidoworld.com/blog/the-debt-endg…. This concern of mine has only grown and been validated through the passage of time. It only makes sense that the US government and its benefactors need for increased wealth and market share would finally demand their being predatory and confiscate what little wealth remains in the hands of its citizens. This blog along with the previous link above regarding the post industrial financial economy present a rather succinct outline of what might be in store for the US middle class, as well as the middle class in most post industrial societies.

The EU’s growing practice of negative interest rates and buy ins, as well as increased discussion regarding the need to construct a cashless society fit well into this unsavory vision of the immanent future (demise?) of the middle class. While the situation is far from hopeless one can’t solve a problem that one doesn’t recognize.

While writing this I agonized on how to present the above information in a manner which wouldn’t quickly be rejected by those on the right or the left, or thought of as just being a paranoid rant and over reactionary. Yet, I doubt if that is possible. I hope that those of you have shown the openness to read this to its conclusion have found the logic sound and the topic provocative.

United in Compassion

Jim Guido

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