When the New Money Generation Meets the Credit Contraction

If all the world’s hedge fund operators, tort lawyers, politicians, headline-hogging prosecutors and world improvers were laid to end to end… how far would they reach?

We don’t know… but it sounds like a good idea.

A McKinsey report (PDF) commissioned by United States Senator Charles Schumer and Bloomberg reports that settlements of securities class actions have been rising every year for several years. In 2005, the total bill hit $3.5 billion, a number that doesn’t include $6.2 billion in WorldCom-related settlements alone. In 2007, settlements in Enron-related suits will add about $7 billion more. All of which is causing capitalists to look at American in a new light.

It used to be that ‘political risk’ was something that caused globally minded entrepreneurs to eschew dangerous Third-World countries. Now, political risk is a major factor discouraging companies from doing business in American.

A CMR report: “Foreign companies commonly cite the U.S. enforcement system as the most important reason why they do not want to list in the U.S. market.”

The economy is getting old. Parasites are all over it.

Lawyers, regulators… Wall Street… Washington… the idea is no longer to expand production and build wealth. The idea-du-jour is simply to redistribute wealth – from the lumpen to the elite… from the old manufacturing economy to the new financial economy… and from the future to the present (by loading up future generations with debt).

George W. Bush, the Army of Heaven, Osama bin Laden – they’re all reactionaries… trying to stand in the way of the Next Big Thing… which is MONEY. Most people today don’t really care about world conquest. What they care about is getting and spending. We want money and we want it now.

According to James Oliver, almost everyone in the English speaking countries now suffers from ‘affluenza’. Have you fallen victim? If you agree with the statement: “My life would be better if I owned certain things I don’t have now,” according to Oliver, you’re part of the new Money Generation.

But if you are afflicted, don’t worry too much about it. A cure is coming, whether you like it or not. Again, it’s called a Credit Contraction.

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.

Leave a Reply

Be the First to Comment!

Notify of
Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to letters@marketsandmoney.com.au