[Phil]

This is an interesting excerpt from a piece that appears to date from late 1989. The Link

The elite with banking interests are not really risking much of their money either, because they themselves have been compelled by law to invest about only 4% of their own money as capital equity. The rest belongs to the bank depositors. In reality, the banking elite are practically not concerned with repayment of loan principal from the 2nd and 3rd World countries, they are really only concerned with reaping in the interest payments on the depositors' money they lend out. That is why taxpayer money was channeled to the International Monetary Fund and the World Bank to enable additional funds to be loaned to potential defaulters to ensure that they could at least pay their interest payments.

I also found this more recent snippet which seems to confirm the "economic consolodation" mentioned in the previous piece.

City Bank of New York, the predecessor of Citibank was founded in 1812. In 1894, it became the largest bank in the US and by 1902, the bank had expanded into Asia. By 1930 it was the largest international bank in the world with 100 branches in 23 countries outside the USA. The bank's name was changed to Citibank in 1976. In the 1980's Citibank began to serve consumer clients internationally and in 1981 it purchased the license of Diners Club International, the credit card franchise. Today Citibank has branches in 102 countries across the globe. On October 8, 1998, all Citicorp and Travelers Group divisions merged to become Citigroup Inc. The Bank of Tokyo-Mitsubishi and UFJ Holdings formally announced on July 16 that they would join forces to form the biggest bank in the world in terms of assets at $1.73 trillion. That will push Citigroup to the second slot with its asset value of $1.3 trillion. Mitsubishi Tokyo, Japan's second-largest bank, and UFJ, the fourth-largest, seek to sign a preliminary agreement by the end of this month, with the goal of merging by September 2005.

My point is to encourage discussion on the what-when-how-why-wheres of the banking elites plans; and how that will affect us, and peak oil.

[Phil]

Economic power is rapidly being consolidated into fewer and fewer hands as a result of the wave of corporate takeovers and conglomerate mergers currently taking place in all the Western democracies. Note, however, that it is vitally important to draw the distinction between economic power and economic ownership. The corporations, that the elite control, are often owned almost entirely by the banks who finance them.

By refinancing their corporations largely through money borrowed from banks, the elite are effectively selling their uncompetitive, ailing corporations to the working class because money from workers' pension funds constitute such a significant chunk of today's bank deposits.

Although they are retaining control of their corporations, the elite are quickly and quietly pulling their money out of American-based industries, and reinvesting it in cheap labor countries. In the wake of a wave of leveraged takeovers, 64% of the value of America's corporations is owed to banks. {B189} Therefore most of the business risk in America has by now been secretly transferred to bank depositors who quite unknowingly stand to lose their life savings if a serious economic downturn ever bankrupted the businesses that their bank deposits are now financing. Based on debt, many corporations are teetering on the brink of insolvency.

As long as the corporations generate profits, the elite can skim them off. But once they go sour, as they would if a serious depression occurred, the elite who no longer have their money in the corporations (only debt through financing), would be free to walk away and allow the banks (i.e., pension funds) to absorb the losses.

[Phil]

consolidation*^^ ... damnit.

[Tyler_JC]

The basic problem with free market Capitalism. There are only 3 major ones. But the other two are nothing compared with this one.

At the end of the day, one man will eventually own every single thing on the planet. This one person will have no one to sell anything two because he will also own all of the money. He will have a monopoly on everything. It doesn't take much for this guy to do this, just get out of his way.

It's like the board game. In monopoly, I'm the battleship, my sister is the horse, and my dad is the car. My sister ends up going bankrupt and I own all of her things. Then my dad ends up losing because I have twice as much stuff as he does. I own everything on the board and would eventually own all of the money in the bank if I kept people around long enough to collect it.

The Elite will always grow richer and more selective. It's not really an evil thing, it's natural. The rich get richer by being rich. But don't worry, when gobalization goes bust do to high transportation costs, they'll be up the creek with the rest of us.

[PenultimateManStanding]

But don't worry, when gobalization goes bust do to high transportation costs, they'll be up the creek with the rest of us.

Shades of Easter Island. By the way Tyler, I'm with you on the music theme for Peak Oil. That song is perfect!