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Big Money Hoarders and the Crisis

The current economic crisis is frequently blamed on over-borrowing by states, banks and citizens. I suggest another angle: the source of the problem is excessive accumulation of wealth, by some countries such as China and large financial groups, such as pension and hedge funds.

Think about it. Money had become cheap, very cheap, in recent years. The hoarders needed to put the money to 'work', they had run out of productive businesses to invest on, so the competition between these hoarders intensified, causing drops in the cost of money and enticing many countries and a significant part of the population to take debt as a normal fact of life.

Money is still cheap, suggesting that the hoarders still have huge reserves, but they are also worried that they might not be repaid in full, so they throw s#*t into the fan by forcing austerity measures that should ensure that they get paid before anyone else.

Borrowers had choices on who to borrow from while money was cheap. Once they became highly dependent on loans, their ability to repay is put in question and the borrower runs out of options. Then the prey is ready: It is time to raise interest rates, force painful readjustments and take over the assets of these debtors, whether they are homes or national energy grids.

The next problem is that these hoarders are also herd followers and they don't realise that in their drive to recoup the money, they are chocking the economies that were supposed to provide them with return on their investment. I have no doubt that we are heading towards a truly proper meltdown.

People in the streets know that there is something wrong, but all they can do is blame the governments and banks, but these were just fools in this game. The big culprits are the handlers of these huge reserves. These reserves need to be cut down somehow. The global economy can't produce enough to allow people a decent standard of living while entertaining massive loans and interest repayments.

The big losers will be the pension and hedge funds. Economies that depend on the financial services sectors such as the UK are likely to need to reinvent themselves. Countries and people will need to relearn to earn before they spend.

As we stand today, the hoarders remain as the last 'sacred cows', but once borrowers truly run out of options, they will finally feel the pain.
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Location: Frascati Rd, Stillorgan, Co. Dun Laoghaire, Ireland

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