The following is an excellent excerpt from the book “THE CRASH OF 2016: The Plot to Destroy America—and What We Can Do To Stop It” by Thom Hartmann from Chapter 11 titled “This Is the End” on page 179 and I quote:
“I think historians when they look at this time, they’re going to wonder why the wealthy overplayed their hand like this. Why would they, when they had it so good? They had the middle class voting for the politicians that the wealthy bought, everything was running just fine, they were posting profits of a billion a year, but that wasn’t enough for them. What they did was started to ruin the lives of the very people who voted for their politicians and supported them all these years, the middle class.”
—Michael Moore, October 2011
If you want to know which way the wind is blowing, keep an eye on the billionaires.
So what are the billionaires telling us just ahead of the crash of 2016?
Well, in 2012, four years before the Crash of 2016, Moody’s Investors Service noted something peculiar. It noticed American companies are hoarding record amounts of cash.
For example, in 2012 Apple was discovered to be sitting on $137 billion worth of cash. Investors actually sued the company to make it pass some of that wealth down to shareholders.
But what Apple was doing was comparatively minor. Altogether, US companies stashed away $1.45 trillion in cash in 2012, a 10 percent increase from 2011.
They aren’t investing it, they aren’t expanding their businesses with it, they aren’t hiring more workers. They’re just sitting on it. They aren’t even paying taxes on it, since, as Moody’s discovered, 68 percent of all that cash is stashed overseas.
Wall Street is also hoarding enormous amounts of money. Dan Froomkin at the Huffington Post explained in July 2012, “The latest report from the Federal Reserve shows that big banks’ cash reserves peaked in the third quarter of 2011, but still near their all-time high at just under $1.6 trillion—an astonishing 80 times the $20 billion they held in reserve in 2007.”
But it not just in the United States; it’s all around the world.
The Wall Street Journal wrote on Europe’s banks holding cash at the end of 2012: “A dozen of Europe’s largest banks reported a total of $1.43 trillion of cash on deposit at various central banks.”
It adds, “That represents at least the sixth consecutive quarter that the banks have increased their overall central-bank deposits. Since the end of 2010, the banks have boosted the amount they are stockpiling at central banks by 84%.”
The Institute of International Finance, a Washington-based organization, calculated that companies in the United States, United Kingdom, Eurozone, and Japan were sitting on nearly $8 trillion worth of cash.
Altogether, the wealthiest people on the planet have as much as $32 trillion stashed away in overseas financial institutions, according to a study by the Tax Justice Center in 2012.
All of this is taking place just as the stock market was reaching historic new levels, and profits in corporate America reached the highest levels as a percent-of-GDP ever recorded. Yet, in early 2013, Money News reported that “a handful of billionaires are quietly dumping their American stocks,” including Warren Buffett, John Paulson, and George Soros.
Senator Elizabeth Warren spoke about another Wall Street quirk during a 2013 Senate Banking Committee meeting.
She noted that while most major corporations trade well above book value, all the large banks are actually being traded well below book value. She concluded there are two possible explanations for this.
“One,” she said, “because nobody believes that the banks’ books are honest.” In other words, the banks are actually still teetering on the edge, and the banks themselves know it.
“Or the second,” she added, “Nobody believes that the banks are really manageable. They are too complex for their own institutions or the regulators to manage them.”
If the economy really doing is so well, then why are the wealthy giving signs of the opposite, quietly leaving markets and just sitting on the sidelines?
The answer is they know what’s coming. They know 2008 was just the precursor, and 2016 will be the real catastrophe.
The billionaires are preparing for a series of economic shocks on the horizon, probably beginning in Europe and spreading across the planet, eventually toppling the United States.
Germany Finally Wins World War II – After the 2007-08 global financial panic, the three main monetary institutions of Europe: the European Central Bank, the European Commission, and the International Monetary Fund—together known as the “Troika”–imposed a strict austerity regime on debt-saddled nations such as Greece, Ireland, Spain, and Portugal, nations that suddenly found themselves in a fiscal crisis and yet had no control over their own money supplies thanks to the structural flaws of the Eurozone.
This austerity has produced devastating effects.
Since the Troika’s takeover of Greece began in 2009, a quarter of all Greek businesses have closed their doors, half of all small businesses can’t meet their payroll, nearly half of all young workers under twenty-five are unemployed, the total unemployment rate is around 20 percent, suicide rates have shot up 40 percent, radical political parties gain traction, and the streets of Athens are routinely set on fire in violent riots.
This is what the Crash of 2016, in its early stages, looks like.
Driving the Troika’s austerity agenda is Germany, one of the few nations in Europe that found itself on the other side of the financial panic and not in a debt crisis.
That’s because Germany acted like America did after World War II (and even outdid us). They built up an enormous manufacturing base, shielded it from low-wage nations, and nurtured a strong middle class with labor protections and a social safety net guaranteeing health care as a basic human right.
They became an export machine. In 2011, they held the second largest trade surplus in the world, over $200 billion (the United States was in debt $800 billion). And they turned into Europe’s primary manufacturing plant, supplying most of the European continent with its goods.
While Germany boasted one of the largest trade surpluses in the world, other European nations were driven into trade deficits. The United Kingdom, France, Spain, Italy, Greece, and Portugal all have some of the largest trade deficits in the world.
Despite the intended purpose of austerity, research from the United Kingdom’s National Institute of Economic and Social Research found, in October 2012, that debt-to-GDP ratios increased significantly higher and faster under austerity than if no austerity had been imposed at all.
But reducing the debt-to-GDP ratios was never the intent of the Royalists allied with Germany and the technocrats at the Troika. Instead, their goal was to harvest Europe in the same way Bain Capital would have done to an American business. Bulldoze the economy and working class, sell off the commons, and then prime Greece to be sold off to foreign investors (many of them German) at fire-sale prices. With the entire continent still racked by economic turmoil five years into the austerity era, Germany has profited immensely.
Since it is the only stable economy left, investors actually pay Germany to take a loan from them. In 2012, Germany was paying a 0.01 percent interest rate on about $5 billion worth of debt. As Der Speigel notes, “Amid the ongoing euro crisis, Germany is one of the few borrowers that are still regarded as a safe haven. Many investors would rather lend the government money at bargain-basement rates than risk losses.”
Der Spiegel goes on to say, “It has become a rule of the euro crisis. While a number of Eurozone countries suffer, Germany profits. The crisis may slow economic growth in Germany, but there are also a raft of crisis-related mechanisms that help the country profit at the expense of other nations.”
As of 2013, Germany has spent or committed to spend nearly $400 billion on these “crisis-related mechanisms” aimed at saving the Eurozone in a way that ensures German dominance over the continent on a scale not even seen since Hitler toppled Paris.
George Soros criticized the German response to the euro crisis, saying, “Germany did the minimum that was necessary to preserve the euro but no more! And that is what maintained the crisis conditions which are now four years old.”
He remarked on what Europe looks like now under German financial rule, ”I am afraid Europe is in an existential crisis. The debtor countries are subordinate to the dictates of the creditor countries and have effectively been relegated to second-class memberships.”
In fact, in January 2012, when it looked like Greece might reject a bailout and leave the euro, Germany proposed ousting the democratically elected government of Greece and installing a European commissioner (think Detroit financial manager) with the power to rewrite the national budget and make sure that Greece takes its medicine prescribed by Germany.
Economist Richard Wolff remarked to me on the Greece situation, in which Royalists are squeezing whatever they can out of the population, “The irony is, when you look back at the history of empires, it has been that narrowness, that failure to look at the long-term, that absorbed self-interest, that has been the final end of those empires.”
(HERE’S A BOOK I HOPE EVERY POLITIICAN READS BECAUSE, OVER THE YEARS, IN THE MANY BOOKS I’VE READ AND PUT EXCERPTS ON MY BLOG SITES, ALL OF THESE AUTHORS SHOULD BE TESTIFYING IN FRONT OF CONGRESS. LIKE SENATOR BERNIE SANDERS SAID QUOTING FROM THE BACK COVER:
“Thom Hartmann is right that America must invest in our transportation and energy infrastructure, promote renewable energy, and rethink the disastrous trade policies that have shuttered our factories and decimated our middle class. I hope his thoughtful ideas about what America needs and his low-and-clear warning about where America is headed will wake us up before his prediction comes true.”
–BERNIE SANDERS, U.S. Senator
NOW, HERE’S SOME OF THE HISTORY ON THE AUTHOR AND I QUOTE:
ABOUT THE AUTHOR – Thom Hartmann is a progressive national and internationally syndicated radio and TV talk show host whose shows are available every weekday in more than a half-billion homes in 104 countries worldwide. He’s the New York Times best-selling, four-time Project Censored Award-winning author of twenty-four books in print in seventeen languages on five continents.
Thom has written extensively about culture, ecology, psychology, politics, and anthropology, The Last Hours of Ancient Sunlight, inspired Leonardo DiCaprio to make the movie The 11th Hour (in which Thom appears). His book Attention Deficit Disorder: A Different Perception sparked a national debate, both in psychology/psychiatry community and among the general public, on ADD/ADHD and neurological differences ranging from giftedness to autism. His book Rebooting the American Dream so inspired Senator Bernie Sanders that he wrote a cover letter to accompany the delivery of the book to his ninety-nine colleagues in the United States Senate and he read from it extensively on the floor of the Senate during his famous filibuster.
In addition to being an accomplished writer, Thom and his wife, Louise, have also started a number of successful businesses and a community and school for abused children. Thom’s also helped start programs ranging from famine relief to medical centers to schools on four continents.
He and Louise live on a boat in Washington, DC, with their attack cat, Higgings.”
IN THE NEXT SEGEMENT OF THIS BOOK, GERMANY, ALONG WITH THE EUROPEAN CENTRAL BANK PROPOSED TAXING PEOPLES’ BANK ACCOUNTS AS COLLATERAL and THERE WAS A RUN ON THE BANK, WHICH RESULTED IN ANOTHER LOSS OF TRUST IN THE BANKING SYTEM SO GERMANY AND THE EUROPEAN CENTRAL BANK GAVE THE IDEA UP. CUSTOMERS MUST BE ALLOWED TO MAKE MONEY JUST LIKE CORPORAITONS. THE QUESTION IS THAT BOTH SHOULD MAKE A FAIR AMOUNT AND NOT AT EXCESSIVE RATIOS.
LaVern Isely, Overtaxed Independent Middle Class Taxpayer and Public Citizen and AARP Members