For years, Republicans and some Democrats have said that a strong government, careful regulation and progressive taxation are markers on the road to serfdom. The politicians and neoliberal economists who spout this baloney say, "Let's take planning out of the hands of government and put it into the "free market.'" What they don't understand is that every market is planned -- by someone or other. And if governments step aside, then planning passes into the hands of the banksters.
The problem is that the banksters have not created credit to finance industrial investment and employment. Instead, they extended credit and allocated credit for speculation on asset price and inflation, thereby encouraging millions of people to borrow, invest and gamble up their eyeballs. By this means housing prices, stock and bond prices, and foreign exchange rates have been bid ever upward, thereby providing enormous profits and winnings for the few, at the ultimate, longterm expense of the many.
Example: Banksters convinced borrowers that they could get rich on ever-rising housing prices. But this merely made new homebuyers go ever deeper into debt to buy a home. And when banks say that rising stock and bond prices are good for the economy, in must be pointed out that these price rises lower the dividend or interest yield. This in turn means that pension funds and individuals have to save much more for retirement. So instead of improving their life, it makes them work harder and borrow more just to stay in place. And when they are forced to work harder, for the same benefits, this makes banksters richer still.
The banking system's alternative to the alleged "road to serfdom" thus turns out to be a road to debt peonage. Thus bankster-managed financial engineering turns out to be worse than government planning.
The banksters have taken over the Federal Reserve and Treasury and put their lobbyists in charge -- men such as Tim Geithner and the others with ties to Rubinomics (dating from the Clinton administration) and especially to Goldman Sachs and other giant Wall Street firms. Reference article
How hedge fund elites are surreptitiously raping Europe
In Greece and Italy, financial markets, banksters and their designated technocrats -- not the country's citizens or elected governments -- are determining who will run the country and what those countries will do financially. To placate financial markets and increase "investor confidence," banksters have in each country replaced the country's leaders with economic technocrats who supposedly will "rise above politics" and "get each country's finances in order."
Why is this happening? The explanation is that those countries are being surreptitiously attacked by large hedge funds that are cleverly trying as hard as they can to create financial runs so as to be able to profit from them. In their circles it's called a speculative attack. Here's how it works. Basically, these hedge funds try to start a stampede of selling, to drive down the value of bonds of a given country. (Understand that when bond values decline, their interest rates go up.) Hedge funds do this by finding ways to bet against those bonds. To accomplish this, they can sell bonds they own, they can sell bonds that others own (shorting), and they can buy default insurance (swaps) to bet against the bonds. And they create many toxic combinations of the above, using massive amounts of borrowed money to amplify their "negative' bets.
If they do it right, all that selling drives down the price of the bonds, and that in turn scares other large investors (investors from mutual funds and banks) into selling their bonds as well, thereby further driving down the price of the bonds. The more the price falls, the more the hedge funds earn. And we're talking about "earning" tens of billions from this kind of stampede.