This article explores the theory that financial collapses, including the US economy's potential downfall, are engineered by powerful financial elites rather than occurring naturally. It delves into the history of global finance, the role of central banks, the 2008 financial crisis, and the shifting economic power from the US to China and potentially Israel, highlighting the complex interplay of capitalism, war, and transnational capital.
Today, we explore a provocative theory: the collapse of the global economy, specifically the US economy, is not accidental or natural but engineered by powerful forces behind the scenes. This concept challenges the traditional economic notion of the boom-bust cycle as a natural part of capitalism.
Economics teaches the boom-bust cycle, where economies boom due to overconfidence and excessive spending, then inevitably collapse. This cycle is likened to gaining and losing weight — a natural process. However, the exact mechanism triggering the collapse remains unexplained in conventional economics.
Andrew Ross Sorkin, a prominent financial journalist, explains that prolonged booms create a collective delusion where optimism becomes a drug or religion, impairing risk assessment. Yet, this explanation does not fully account for the precise triggers of economic collapse.
Banks play a crucial role in the economy by lending money to entrepreneurs and businesses. Interestingly, banks can create money through lending, effectively doubling the money supply. This illusion of money as a concept or collective hallucination underpins the financial system.
Central banks coordinate this system by signaling banks on whether to lend money through interest rates. Contrary to popular belief, interest rates primarily guide banks' lending behavior rather than consumer spending. Low interest rates encourage banks to release more liquidity, while high rates restrict lending.
We live metaphorically in Plato's cave, where the elite manipulate our perception of reality through money, media, education, and culture. The global economy is controlled by "game masters" — powerful financial institutions like the Bank of International Settlements (BIS), World Bank, International Monetary Fund (IMF), Wall Street, and the City of London.
These entities control the flow of US dollars, the currency of global trade, and maintain the illusion of a fair and transparent international order through organizations like the WTO and the UN.
The modern financial system traces back to 1688's Glorious Revolution, a union between the British Empire and the Dutch Republic. The Dutch, rich from the spice trade but militarily vulnerable, combined forces with England, leading to the creation of the Bank of England in 1694.
This private bank, accountable only to Parliament, could print money and finance wars, prioritizing profits while socializing losses to the nation. This system fueled British imperial expansion through wars and open borders facilitating capital movement.
To justify this system, intellectuals sponsored by transnational capital promoted materialism — the idea that money is god. Philosophers like John Locke argued private property is a god-given right, David Hume advocated skepticism about knowledge, and utilitarianism posited that pleasure (often equated with wealth) is the ultimate good.
Later thinkers like Marx introduced dialectical materialism, framing history as class struggle, while Darwin and Freud emphasized humans as animals driven by primal desires. These ideas underpin the capitalist ethos of liberty as freedom to pursue wealth.
After the American Revolution, transnational capital sought to invest in the US through agents like Rockefeller, Carnegie, and JP Morgan. They established monopolies and created the Federal Reserve System in 1914, mirroring the Bank of England's model.
This system led to significant events: US entry into World War I, the 1929 stock market crash, the Great Depression, and World War II. Post-war, America emerged as a global hegemon, shifting manufacturing to China and focusing on finance, culminating in the 2008 financial crisis.
The crisis was precipitated by subprime lending — loans to borrowers unlikely to repay. Bill Clinton's policies encouraged minority homeownership, and the repeal of the Glass-Steagall Act allowed banks to engage in risky lending.
Massive investments flowed into US financial markets from global investors, including Japan's yen carry trade, borrowing at near-zero interest to invest in higher-yield US assets.
Banks created complex financial instruments like collateralized debt obligations (CDOs) based on these risky mortgages. The system was deemed "too big to fail," implying that widespread defaults would collapse the economy.
However, some individuals profited immensely from the collapse. John Paulson made $20 billion by betting against the housing market, illustrating that the collapse was profitable for a few.
Post-crisis, large banks consolidated power by acquiring failing institutions, increasing their control over assets, including homes lost by individuals.
Today, bubbles exist in private equity, private credit, and artificial intelligence sectors. These bubbles persist because banks allow struggling companies to continue operating, avoiding immediate collapse.
The AI bubble, exemplified by companies like Nvidia and OpenAI, is notable for generating losses despite high valuations. These bubbles may collapse when it becomes profitable for insiders to trigger a downturn.
After 2008, transnational capital encouraged China's economic rise to stabilize the global economy. The Bank of International Settlements (BIS), the central bank of central banks, coordinated this shift.
China's currency appreciated against the US dollar, signaling global markets to trade more with China. This influx of commodities enabled China to invest heavily in infrastructure, financed by bank loans.
By 2024, China had the largest banks globally and became the dominant exporter, reshaping global trade.
China's reluctance to assume military hegemony and US resistance through tariffs limit its global dominance. Consequently, the economic center of gravity may shift to Israel, which seeks regional dominance through ongoing conflicts and reconstruction efforts.
Israel's strategic location and ambitions position it as a potential new hub for global trade and investment.
Transnational capital may engineer a collapse of the US economy by bursting existing bubbles to facilitate capital flight to new centers like Israel.
America faces challenges: an aging elite, excessive liquidity leading to risky behavior, and military setbacks diminishing global influence.
While economic collapse will cause widespread pain, some view it as necessary for America's long-term renewal, akin to a painful cancer treatment to remove parasitic elements.
The global financial system is a complex, interconnected web controlled by powerful elites who engineer economic booms and busts to maintain and shift their dominance. Understanding this system reveals that economic collapses are not mere accidents but strategic moves within a grand game of capital and power.
Future shifts in economic power will continue to reshape the global landscape, with significant implications for nations and individuals alike.
Further discussions will explore the long-term strategies and consequences of these financial maneuvers.
