Friday, 14 September 2012



News this week is that the European Central Bank ECB is pumping in $500 billion and Ben Bernanke at the US Treasury is pumping in $40 billion a month “for as long as it takes” or $480 billion this coming year. Call it one trillion US dollars of new money, which might stimulate 28 million new jobs – compared to the EU and USA labour force of about 380 million – or +7% - if well invested.

That is only 5% of the liquidity siphoned off since 1980 by the super-rich to tax havens - and ¼ of the $4 billion “lost” by Wall Street and London in 2008/09 (actually siphoned off-shore via dodgy paperwork) replaced by taxpayers – and it is a fraction of the liquidity removed from the global economy by deleveraging Wall Street and the City of London banks in 2009 from lending/investing 32 times their capital down to 8 times.

Hear the howls of rage from the off-shore “free markets” at major governments “printing” money and diluting their hoarded cash balances. The super-rich have had 4 years of sitting on their tax-free assets, refusing to invest at home, of seeing the global economy starved of liquidity, of destabilising entire national economies – and thus being able to charge extreme interest rates on risk-free Government Bonds and other forced loans. They have been getting richer by the day – by withholding scarce cash, paying no tax and depriving people of jobs and of any hope for the future.


The economic reality is that the amount of money in circulation MUST keep up with the real-economy. If you cancel money, restrict liquidity, it reduces the paper-economy and thus the real-economy’s contracts, deals and transactions. Money is central government’s permission to work. It is a “medium of exchange and a means of account” it is bookkeeping. Food, houses, energy, clothes, vehicles, electronics, entertainment, health-care etc are the real-economy. There HAS to be enough liquidity in the Money-Economy to enable the transactions we want to effect in the ever growing Real-Economy.

$1 TRILLION is a bit more than a drop in the ocean, it matches the annual amount of tax-evasion-capital-flight, but what is really needed is all the $21 Trillion that is Off-Shore to be brought back On-Shore. The corporate and individual tax dodgers must put the money back they have siphoned out over the past 30 years; if not voluntarily, then via false accounting and Back-Duty-Tax cases – “guilty until proved innocent” – send in the Marines.

No comments:

Post a Comment