Mayer Rothschild was quoted as saying “give me the power of the money and it will not matter any more who is commanding.” Today Wall Street is in full command of our government. The impact of massive lobbying has guaranteed that many of our politicians are bought off and are serving as serfs to their feudal lords on Wall Street. How else can we explain the lack of reform in the financial industry after the biggest economic crisis since the Great Depression? Wealth is massively concentrated in a few hands in America. Just because you have access to debt does not make you wealthy. 83 percent of all U.S. stocks are in the hands of the top 1 percent.
Let us look at the data:
Source: ACS, Lending Tree Report
The above is a clear example of why the recent Bull Run in the stock market made very little impact in the real economy. Unemployment is still extremely high and most Americans still live with the effects of a recession. The housing market is still in disarray yet the boom in stock values has benefitted those that least need it in the market. The notion that stock wealth is evenly disbursed is nothing more than Wall Street propaganda. Look at the above data and you can see why.
Many Americans have been under a spell thinking that they have been getting richer merely because they have more access to debt. Wealth is measured by net worth, not how much debt you have. And Americans are drowning in mountains of debt. The share of debt that now goes to housing and consumer credit is off the charts:
The above chart highlights a clear reflection of the decade long housing bubble. Even though the housing bubble only ramped up in the last decade, the pattern was already taking place for well over 50 years. Back in 1949 the mortgage as a share of personal income only ate at 19.6 percent of income. In 2003 it had shot up to 85 percent. Is it any wonder why so many people were taking on massive amounts of mortgage debt in the last decade? Someone during the housing boom was quoted as saying:
“[It is] weird to be a young person living in Washington, [D.C.] with this sort of housing bonanza, a psycho-frenzy thing going on. It’s just so very tiring. Sometimes I feel like for me, yeah, having a house would be great but it’s almost become something that I feel like we’re being programmed to do, that it is [an unquestioned] part of the American Dream.”
Most bought into this programming and went ahead and took on massive amounts of debt from the banking giants that turned many into debt slaves. No one forced these people to sign but neither did anyone force the banks to make these toxic loans. Yet today, the only group actually getting a bailout is the banking sector. Those that took on those massively bad loans are destined to lose their homes through foreclosure and have ruined credit. What consequence do banks face? They serve the needs of a very small cohort in our population and our government is at their service.
Just look above one more time and look at how much money now goes to home equity debt. This was unheard up until the 1990s. In the last decade mortgage equity withdrawals financed a large part of our economy from vacations, to upgrades, to new automobiles. It was largely one giant façade. The only group that saw their status increase was the top 1 percent. Everyone else saw their quality of financial stability decline:
I’m sure when data is released in September by the Census, the numbers will look even worse. Income on an inflation adjusted level has been falling for well over a decade. Most Americans were deluded into thinking that debt was equal to wealth. Or to be more specific, what they were able to finance with debt. Just because you have a leased foreign car and a large McMansion does not make you wealthy. All it does is makes you a slave to the objects but also the banks that finance the deal. Unlike the banks, you do not have a lobbyist looking out for your interest.
The way out for many is through getting an education but the banking system has now inflated the cost of education. We have for profit schools that provide very little benefit as shown through data but their costs keep going up because they have mastered the ability to take taxpayer loans and push people into their system like a paper mill. The cost of college keeps going up as income keeps going down:
The only way to understand finance is to get educated but the cost of that is going up. So you have an enormous serfdom of those who have very little understanding of finance being subjected to the whims of the banking sector. In the end, the banks have managed to calm the masses and numb their ability to reason because what has occurred over the last few years is the greatest wealth transfer in the history of our nation. It didn’t take a war or coup but simply happened by pure momentum and sheer inactivity. They system is in a deep capture.
Even being in the industry does not keep you from buying into the delusional propaganda of Wall Street:
“I studied finance… I learned about stock investments when I was 18 or 19. I took money that I saved since I was a kid and invested in stocks. It was $10,000. I made it into $80,000 in 2 years in stocks. But I had $150,000 invested because of margin and I lost all of it. Now I’m looking at the real estate market. I’m like, huh. I learned my lesson in the stock market. Should I sell my real estate that has gone up in value by 80 percent?”
This quote was taken at the height of the housing bubble. How many people do you think lost money in the stock market and the real estate bubble? Trillions of dollars were lost yet somehow, the top 1 percent came out ahead. They will argue that they are not as wealthy as before but keep in mind even if you lost money, the cost of other items has also fallen. Money is only as valuable as what you can buy with it. And this tiny group has become all the richer in this crisis. You can now by the yacht for half off while your stock portfolio fell by 15 percent.
For all the back and forth with Social Security, an enormous part of our country depends on it for its income:
A stunning 40 percent of those 65 and older depend on Social Security for over 80 percent of their income. 60 percent of this group depends on it for at least 65 percent of their income. If we look at 8 out of 10 in this group, at the very low end they depend on Social Security for 45 percent of their income! And this makes total sense because stock wealth is concentrated so heavily in the hands of a few. And they want people to put money into the stock market casino? Wall Street is simply looking at eliminating another line item here. Controlling wealth is more important than who controls the government. Rothschild had it right.
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