The World Has No Money, And The Emperor Has No Clothes
May 17, 2010
Most of us are aware of the very old fairly tale by Hans Christian Andersen in which two weavers promise an emperor the finest suit of clothes imaginable, but from a fabric invisible to anyone who is unfit for his position or “just hopelessly stupid”. Well, in the fairy tale it turns out that nobody wants to admit that they are “unfit” or “stupid”, so when the emperor parades before his subjects in his imaginary new suit of clothes, it takes a child to cry out: “But he isn’t wearing anything at all!”
Well, many of us have been declaring that the world economy “has no clothes” for some time now, but when the anchor of NBC News declares it on national television it gets a bit more attention. During his recent appearance on The Late Show with David Letterman, NBC’s Brian Williams was asked about the world financial situation. His answer included this shocking statement: “The world has no money, and the Emperor has no clothes.”
During the interview, it was readily apparent that Williams was honestly shaken up by what had happened last Thursday in the stock market. But who can blame him? After all, most of us who watch the markets were totally stunned when the stock market dropped almost 1000 points exactly in less than an hour.
Normally a network news anchor is much more guarded and is much more careful about what is revealed to the public. But on Letterman’s show, Williams gave us a glimpse of what he really thinks about the world economic situation….
“If I wasn’t a tad too close to this, I’d probably not leave the house. But that’s how bad it is.”
So why did the U.S. stock market plunge so rapidly last Thursday?
Well, many have blamed the episode on a “bad trade” or a “computer glitch”. Others claim that the Greek debt crisis caused a brief panic. There are yet others who see something more insidious going on – such as Goldman Sachs seeking to remove their name from the financial headlines, or the Federal Reserve sending a message that S. 604 (the bill to audit the Federal Reserve) should not be passed.
The truth is that we will probably never know what actually caused the market to fall through the floor that afternoon.
But it did pave the way for more bailouts.
Over the weekend, European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases designed to stop the sovereign debt crisis that threatened to shatter confidence in the euro.
The Federal Reserve got into the act as well. Over the weekend the Fed promised to flood the international financial system with U.S. dollars. This was seen in the markets as a sign of “resolve” meant to keep doubt about the European economy from turning into a global crisis of confidence.
So on Monday, investors responded to these bailouts with exuberance. The Dow Jones industrial average gained 405 points that day, which was the average’s biggest one day point gain since March 23rd, 2009.
But are more bailouts, more debt and a flood of paper money really something to celebrate?
The truth is that debt and paper money that continually declines in value are some of the chief causes of the financial mess that the world is now in.
In fact, Congressman Ron Paul is warning that the European bailout that was just announced will just lead to even larger financial problems in the future….
And Ron Paul is right – all of these bailouts and all of this debt will eventually cause all of the major paper currencies (including the U.S. dollar) to collapse.
The funny thing about these bailouts is that they never seem to help the average people on the street. Just take a look at the U.S. economy. We are told that Wall Street has recovered and that things are getting back to normal, and yet more Americans than ever find themselves dependent on the U.S. government for their survival.
The U.S. Department of Agriculture recently announced that 39.68 million people, or 1 out of every 8 Americans, were enrolled in the food stamp program during February, an increase of 260,000 from the previous month.
Nearly 40 million Americans on food stamps?
How in the world did that happen?
Once upon a time, the old timers would tell us that one day things would get so bad that we would all have to stand in bread lines.
Well, today food stamps are the new bread lines.
If you have to rely on the government for the very bread that you eat, what kind of a position does that put you in?
The truth is that the once great American middle class is allowing the system to slowly keep grinding them into oblivion.
Like never before in our lifetimes, wealth is being concentrated in the hands of the “lucky one percent”, while the rest of us are rapidly being marginalized.
Do you ever stop to wonder why it seems like almost everyone is either broke or up to their eyeballs in debt?
That even goes for the major governments of the world. The U.S. government (the “wealthiest” nation on the globe) has piled up the biggest mountain of debt in world history.
You see, Brian Williams was actually chillingly accurate when he declared that “the world has no money”.
So if the world doesn’t have any money, then who does have it?
The international bankers.
But, shhhhh, don’t tell anybody.
Just keep quietly clapping as the emperor walks down the street with no clothes on.