Miltiades:
S&P, like other credit agencies, gives an indication to the entire financial world as to a country's ' standing in attracting investment.
Is this the same S&P that had Lehman Bros with an AAA rating the day before it went bankrupt. The same S&P that gave Fanny Mae and Freddie Mac the same AAA ratings when they had toxic mortgage account’s that ran into billions? As I said these credit agencies work in the interests of their customers ........... the Banking system.
Banks are the most important institutions in any nation on this planet. Like or not no nation can thrive in the economic arena without a strong banking sector. A nation can survive without any industry, but can not survive without the banking world.
But if you have no industry what do you invest in? The markets, through these Investment Banks? What do they produce
NOTHING ....... they manipulate numbers in a computer on the laws of chaos and probability ...... to you and me that’s called guess work!
Do you really believe this is the essential sector that makes the real economy work? It makes the financial sector work nothing else!
Which banks are you talking about...... Commercial or Investment banks?
Commercial banks are essential for the services they can provide for the real economy. They are a part of the process of wealth creation and are an integral part of the manufacturing, wealth creating economy.
Investment banks are the creators of nothing but problems for all of us! They do not reflect what is happening in the real economy and they are no more important than the Casino’s in Las Vegas and Monte Carlo are to the world economy. They produce nothing and do not support wealth creation ...... they turn money, into more money, into more money into more money .......... nothing else.
Listen to the Radio or watch the TV, they are all on about the stock markets, bond markets, commodities markets, currency markets etc.etc. It is a fairy tale world totally divorced from reality. Think about what they are talking about ..... the financial system ..... certainly not the economy. It is a huge gambling system!
Ask yourself a simple question;
What is a share? Answer : it is a receipt for a payment made to a company when an investor gave them money ..... note,
GIVE not lend, it is not even an IOU. The Investment banks then play with these pieces of paper using their markets, causing the perceived value of this receipt to rise and fall and every time that happens some bankers somewhere make a few millions for themselves and their clients. It does not create real jobs or real wealth!
What effect does the share value have on the Company the original investor made the payment to? Nothing .... it carries on producing and selling what it produces and sells ...... i.e. it carries on creating real wealth. The Markets simply alter the perceived value of the company, but what happens if you try to sell those shares at their market value ..... the price plummets. Trading on the shares of just a single company can happen at the rate of millions of trades a second. 85% of share transactions in the stock exchanges are now done without human intervention!
Investment banks contribute
NOTHING to the economy ...... it’s all just numbers. The EU will use the UK’s reliance on the financial sector to bring the country to its knees .... or at least try. They won’t take the commercial banks, only the investment banks. We DON'T need them ..... it is a totally false economy.
IMO: Let Europe have them ...... and get the UK back onto the path of creating real wealth for everyone, not just bank accounting numbers for the few!
