A few years ago, when all the hedge funds bombed and the Wall Street bankers admitted to having squandered billions of other people’s money a world-wide recession happened. Why did it affect the whole world and how did the American government bail them out? The better question would be why nobody went to jail, except Bernie Madoff, but he was not a part of the Wall Street Bailout scheme.
The Emergency Economic Stabilization Act of 2008 was cover up for approximately 700 billion US dollars worth of mortgage backed securities – the US Government took it over and as a consequence plenty of homeowners in the US lost their homes. Most stock markets reported drops of indexes but no real explanation was forwarded to the common folk. The incomprehensible mumbo-jumbo that was proclaimed through various PR outlets spoke similarly about a crisis, but nobody explained why little people had to pay for bankers’ failures.
In common sense, there is no illogical talk about monies simply vanishing. There is a certain amount of currency out there and that amount is all there is. When new money is printed on paper, old money is being removed from circulation, so there is always a certain amount of money out there. If bankers of Wall Street lost 700 billion, then the replacement had to come from somewhere. The US government and consequently the USA have a national debt that surpasses a dozen trillion dollars, so they did not pay for it, at least not really. They went into additional debt in order to cover for it.
Needless to say that the whole world had to provide the money that was missing, unless the world wanted to make the US default on their debt, which will ruin all economies of the world, except for the EU. The EU has made it a point not to rely on the US financially – except for the UK – but other countries were hit bad, particularly China and Japan. They are the largest investors in the US with over a trillion US dollars on capital invested each.
Amortisation of such expenditures is made by forwarding such amounts down and inevitably such forwarding ends up with the individual people, whereby most certainly not with the people who control the markets, i.e. bankers and government people. In other words, the rich are getting richer, the poor are getting poorer. Since that the perpetrators of the scam never paid nor answered legally for their scam, the common people got duped with another one, defining the inevitable conclusion: it was a planned action, it was controlled and executed in favour of the wealthy and nobody got blamed. The only outcome is that the financial rift between the super-rich and the rest of the world became even bigger. This is why and how such a recession, completely fabricated, affect all of us, except for the rich – simple, is it not?