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Jack the wealthy investor: Part 3

Dickson C. Igwe. Photo: VINO/File
By Dickson C. Igwe

Jack the billionaire Investor never really loses. When the global economy comes crashing down as a result of unsustainable mortgage and housing debt Jack buys bonds from Uncle Sam: the safest form of investment. Jack smiles from ear to ear.

Then when the global economy is growing rapidly, even overheating, Jack rakes in hundreds of billions of dollars in profits and revenues from his corporations and investment funds.

When people are wrapping themselves and their families up in easily available debt, Jack laughs all the way to the bank. Jack owns the bank. The interest payments to the bank by Tom the Consumer ultimately end up in Jack’s back pockets.

Then when everything goes south because people are mad they have been taken for a ride. Jack’s wealth keeps the government alive. Jack eventually ensures the politician puts a FOR SALE sign on his office door. Jack is BOSS! 

OK. Debt drives the modern global economy. And this debt is ultimately Jack the Wealthy Investor’s cash: cash that Jack the Investor lends to the world.

The debt process leads to a rapidly growing public and private debt. The debt mountain starts with a small hill. It begins with Central Banks who create cash by selling bonds to investors.

There is a symbiotic relationship between the Central bank and the investor that is critical to the global economic and monetary ecosystem. Debt is a key and ubiquitous feature of the modern economy.

The modern 21st Century economy is driven by debt that is in turn used by both supplier and consumer: business and shopper.

The investor sits at the top of the totem pole: the financial food chain. The investor is fully aware that debt- the loans and credit he offers consumers through the financial agencies he controls- drives the businesses that bring him the hundreds of billions of dollars of revenue that keep Jack part of the 1% that rules the planet.

And bonds are simply debts sold by Central Banks. Bonds are a promise to pay the investor – the bondholder- the cash back at a later date with interest. Bonds are debts sold to investors by government-controlled Central banks. Bonds are the raw material of the global monetary system.

Bonds are the first page in the debt narrative. The Central Bank is the debtor of last resort. That is the reason why the Federal Reserve and the European Central Banks were the sole agencies able to shoulder the unsustainable debt burden that sank the global financial system in 2008.

These central banks were able to pump hundreds of billions of dollars into the global economy at the time to prevent a deep depression.

That cash -that must have had the money printing machines at mints connected with the central banks working 24/7- was essentially the creating of hundreds of billions of dollars of debt that was sold to Jack the Investor to save the world economy: the term is QE: Quantitative Easing.

Jack was quite happy to buy this debt as it was guaranteed by the western world’s most powerful governments.

All debt is ultimately owed to Jack the Wealthy Investor. To be continued!

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