----- Original Message ----- From: John Hermann <[EMAIL PROTECTED]> To: John Hermann <[EMAIL PROTECTED]> Sent: Wednesday, 8 December 1999 8:28 PM Subject: Reflections on a Stock Market Crash Scenario > Economic Reform Australia > ERA EMAIL NETWORK > > From: David Keane <[EMAIL PROTECTED]> > > > Reflections on a Stock Market Crash Scenario > by David Keane > > There are many today who believe that the stock market is over-inflated, > and simply through natural adjustment of the economic system, the market > will very soon fall by some 30%. I do not wish here to discuss the reasons > why, or to argue this point. But let us simply take this possibility as a > starting premise. > We add now a second premise. The Earth is on the verge of a major external > shock of global proportions. There are at present fears and rumours of such > mega shocks as convulsions of nature (earthquakes), global warming crises > (ultra heat patterns, melting of polar ice, ultra turbulent weather > extremes), magnetic pole reversal (will the global computer system cope in > the transition period of null magnetic field, as computers need a powerful > magnetic field to retain memory?), world plague (there are fears of > super-flus emerging resistant to antibiotics), terrorism, world war, > partial nuclear war, world famine, mega-pollution problems, world energy > crises, cut-off of global oil supplies, the list goes on. > Now we know that stock market correction is more likely at times of global > economic uncertainty. It seems highly likely therefore that the 30% natural > correction will coincide with a time of global external shock. When one of > these shock factors happen in the future, two or more factors may > co-incide. And humanity, in playing its suicidal games with the global > economy, seems to be destabilising many of these other global dangers, > without plans for correction at times of crises. > Let us therefore imagine that there is in the near future a major global > external shock, that at least in the mid term incapacitates 30% of the > global economy. It may well be that this will coincide with a market > correction, also of about 30%. And so the net effect will be about a 50% > crash of the stock market. > Let us now add a third premise. That major stock market investors are > playing a game. The name of that game is to maximise individual profits for > the multi-national corporation. In this game, ethics or considering the > good of the whole have no part to play. We know that these "win at all > cost" rules are the rules that the multinationals and market traders swear > by. There is no room for softness in the ultra high-tech game of global > investment. > So let us add this third premise to the first two, and see what may happen > if all three premises should simultaneously co-incide (as they are most > likely to do). > It is a curious thing, that hedge fund traders make a "killing" at times > both of acute bull (rising) and acute bear (falling) stock market activity. > Their sophisticated computers are so sensitive, that they forecast the > market trend hours before others come to realise there is a crisis. And > then over a few hours they shift vast amounts of funds, in the process > destroying entire corporations or national economies. > But were their computers to forecast that the stock market will in all > likelihood fall 50% over the coming weeks or months, when they do the > analysis, the maximum profit requirement may very well cause the computer > to feed out the following advice: "Withdraw all corporation funds from the > stock market". > Let us paint a scenario. Monday morning. There are world headlines about a > possible mega shock. Scientists are fiercely in dispute. Governments assure > the public that all is well. Monday afternoon. Wall Street gets the > jitters, and there are signs of an imminent collapse. The President and > Prime Minister make public addresses to assure the public of all the > reasons why we have never had it so good, and that this will only be a > minor correction. Midnight. The worst case scenario eventuates for the > global mega-shock. The case that very few were prepared to admit was > "possible". A mega finance mogul decides that the stock market will > inevitably collapse to half its value, and so decides that in the morning > he will withdraw all his multinational corporation finances from the stock > market. He knows that this will cause the stock market to fall by about 5% > through this action alone, but all his life his philosophy has been to act > first to avoid losing the game. > Tuesday morning. The morning newspapers have dire forecasts, but as Wall > Street opens for the day, management promises that Wall Street will never > close its doors. Five minutes after opening, there is panic on the floor. > Prices are falling everywhere. Then a major multinational transfers all > stock market funds out of the stock market. Wall Street management calls > for a crisis meeting, as other mega corporations withdraw all their funds. > The movement of major capital (moved by just a click on a computer terminal > any minute of the day) is picked up by other major players and within > twenty minutes most of the major capitalists and multinational corporations > have, through a domino effect, withdrawn their investments entirely from > the stock exchange. Moreover, these multinationals now own most of the > government instrumentalities that have formerly been privatised. > Tuesday morning, an hour after Wall Street had opened, the doors of Wall > Street have closed. But the closure was too late. On the mid-day news we > are told that the stock market has collapsed. It will never open its doors > again. Over the next few days, what has happened becomes known to the > public, and we discover that 50% of the stock market funds have been moved > by multinationals out of the stock market. This has bankrupted the stock > market. All remaining shares are valued at zero. They are worthless. In > just an hour, the immense wealth of the medium investors has vanished > intonothingness, in effect won over by the multinationals. The middle > investors are now highly indebted to, and therefore utterly slaves to the > multinationals. > All the vast wealth of the former stock market now resides in the hands of > the dozen richest men on Earth. They now own not only the wealth of the > former stock exchange, but also most of the government instrumentalities > that have been privatised in the boom years of rationalist economics, and > they will be the new creditors for the colossal world debt. And so they act > before governments come to understand what has happened. They move to > ensure that they have ultimate power, and that governments are impotent to > regulate against them. These faceless men become the new Law. After that, > taxpayers will be utterly servants to their will. Democracy as we have > known it will be dead. > > ----ooOoo---- > > > ---------------------------------------------------------------- This is the Neither public email list, open for the public and general discussion. To unsubscribe click here Mailto:[EMAIL PROTECTED]?Subject=unsubscribe To subscribe click here Mailto:[EMAIL PROTECTED]?Subject=subscribe For information on [EMAIL PROTECTED] http://www.neither.org/lists/public-list.htm For archives http://www.mail-archive.com/[email protected]
