Finance is killing the Economy

By Dario de Judicibus – We use a certain amount of materials, energy, knowledge and time to develop a specific good or service. In practice, we are transforming those materials, that energy, that knowledge and that time into something whose value will be determined precisely by the mix of these four ingredients. Of course these ingredients have different values in different countries.

This is the first mechanism that is using finance to kill the economy: instead of supporting the production and living off the interest on loans to enterprises, banks earn much more through the derivatives market, that is, not only are they no longer interested in the fact that debt is really solvable and have more capital equipment to manage bad debts, but they gain just when the production system is suffering.

It’s a bit as if I would bet on the fact that my best friend will lose a boxing fight. The more he loses, the more I become rich: who cares if he is beaten up, then? more>


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