Let's see whether financial elites are good or not for the economy. By financial elites I mean billionaires. Well of course everyone would say no, the top 0.1% is evil, they are corrupt, and such....
Well let's analyze it from a different point of view. Suppose they don't have a choice? I mean it's not that they are evil, but they don't have a choice.
Let me explain this
Well the current financial system is based on inflation, which means that wealth is redistributed to the Government, where it is usually wasted.
If you have 1 billion dollar, you must invest your money or you lose it slowly. And they don't want to lose it, especially not to wasteful spending. I don't think there is anything more irritating to a rich person than to see somebody spend recklessly.
And even if there is no inflation, markets still move up and down, so you can't leave all your wealth in 1 asset, you have to move it around eventually. There is no safe haven in finance, you have to be adaptive or lose your money.
Okay so rich people are moving their money around, and investing in certain things. But where do the billionaires invest?
Government Bonds
This is the problem. Because if you have 1 billion $ or more, you have to keep a large chunk of your wealth in very low risk assets, because other market's don't generate that much wealth.
So they all put their money in Government Bonds. Generating like 1-2% yearly, which is good if you have like 1 billion $, that is a 10,000,000 revenue yearly, and they also get the money before the inflation, I mean the Government Debt itself is the inflation, so it's basically inflation free money.
So even if they don't make money at least they don't lose their wealth, and they grow their wealth from other, lower markets, that have better ROI like stocks or commodities and such....
Now this is the problem, because rich people are buying Bonds, which guarantees future taxation.
They buy the Bond from the Government ,and the Government pays them back 5-10-20-30 years later with interest? But where will the money get the money to pay them?
Well from taxes of course and from future Bond issuings....
Yes it's a PONZI SCHEME
The Government Debt , issued through Bonds is a Ponzi Scheme. It literally guarantees future taxation of the citizenry, like the income tax and such....
But they also issue more and more bonds, lately they issue only short term bonds, since nobody is stupid enough to loan the Government money for 30 years, they know they won't be able to repay it.
I mean just check the debt level here:
It's a Ponzi Scheme, that is about to go bust. I mean in 5-10 years we are in for a reset. The US debt with 20 trillion and the EU debt with 9 trillion is unsustainable.... and it's going exponential.....
Taxes are through the roof, there is no way to pay for this. The Scam is about to come to a close.
Cryptocurrencies
The rich people know it's a scam, but they just want to protect their wealth. But they are not stupid, they know the system is about to go bust, so they are already moving their assets into safe havens:
- Gold
- Silver
- Cryptocurrencies
Yes you already see big banks and billionaires investing in BTC and ETH. They are desperate, they just want to protect their money that's all, they are not evil.
But if they invest in Cryptos which is already very very innovative, they will start helping humanity now. They will work for us now, in our benefit.
Because if they buy bonds, that only finances the Government, and their endless wars and militarization of police and things like that.
It's time to invest in the future for a free and prosperous world, and any investor who joins us, rich or poor, is welcome here!
Sources:
https://pixabay.com