The Crisis of Common Sense:
Is It So Difficult To Understand The Financial Crisis?
By Matthias Chang
www.globalresearch.ca/index.php?context=va&aid=11575
Global Research, January 1, 2009
FutureFastForward.org
Thinking & Common Sense
God gave us a brain to think, to think naturally and in simple terms,
and not in a complicated way.
When we think naturally and use common sense to address problems we
will be able to arrive at simple solutions.
But our education system tortures us mentally and forces us to think
in complicated ways. Our teachers, economists, politicians and so-called
experts in God and religion make mountains out of mole-hills, turning simple
truths to complex arguments and "scientific theories and equations".
These experts need to make things look difficult to survive and to
make sure that we have to rely upon them for solutions. It is often said
that, "in the land of the blind, the man with one eye is the King".
Thinking used to be a pleasure and so very invigorating. But now
experts have ensured that thinking is difficult and tiring, so burdensome,
that we don't think at all.
The result is that common sense is thrown out of the window, and we
have been conditioned to rely on our mental crutch, the so-called experts to
think for us.
How sad.
It Is So Difficult To Understand The Financial Crisis
Many have expressed to me that they are overwhelmed by the complexity
of the global financial tsunami and are absolutely confused as to how to
prepare and survive the crisis.
When I explained in simple terms, they refused to accept the
explanations as to them "it was too simple. It must be more complicated as
otherwise how can the crisis become a global fiasco?
Consider the following and my simple explanation:
1. financial engineering: new ways of gambling
2. Investors: gamblers
3. Stock & Futures Markets: casinos
4. Financial Analysts: casinos' salesmen / women
5. Bonds: I.O.Us.
6. Banks: Dishonest Money-lenders (actual money-lenders licensed not
as banks, but as money-lenders, cannot create "money out of thin air". They
have to use their own capital - 100% to lend)
7. Currencies / fiat money toilet papers
8. Derivative markets: ponzi scheme
So many people have difficulty accepting my explanations as the simple
reality. This is even after the recent exposé of the US$50 Billion fraud by
Bernard Madoff, the former chairman of NASDAQ. He declared to the FBI, that
his scheme was essentially a Ponzi scheme (i.e. using one set of "investors'
money" to pay off an earlier set of "investors").
Banks worldwide have collapsed!
Why?
Two reasons - (i) they gambled at the casino and lost trillions and
(ii) almost all their borrowers that borrowed huge sums (leveraging 30 times
or more i.e. if a borrower has $1 million capital, he can borrower $30
million) have defaulted.
Common sense tells us that if our income is only $X and we borrow 30
times in excess of $X, there is no way that we can repay the debt, unless
our gambling bets pay out in excess of 30 times the original amount of $X.
Common sense tells us that if our total family monthly income is e.g.
RM3,500, we cannot afford a lifestyle that requires a monthly expenditure of
RM10,000 financed by credit-cards with only 5% monthly payment on the
outstanding. When interests start piling up on the accumulated monthly
outstanding, a point will be reached whereby the cardholder cannot even keep
up with the payment of the interests. The cardholder defaults and he gets
sued by the lawyers acting for the credit-card companies and or banks.
Common sense tells us that if you are conned into buying something
allegedly worth US$500,000 when its actual value is US$5,000 and you
borrowed to buy the inflated "asset", there is no way that you will continue
paying the installments and the interests on such an acquisition. The bank
on the other hand is stuck with an "asset" supposedly worth US$500,000 but
its actual worth is only US$5,000 or less.
Common sense tells us that the banks and the governments (fearing a
systemic banking collapse) will lie and cover up the con-game until it
cannot cover up anymore as too many banks are having the same problems and
more importantly, the con-game cannot be covered-up anymore because
borrowers are walking away and saying to the banks and governments - "You
conned us, you take the blame."
Common sense tells us that these so-called assets which "investors"
have invested cannot be real assets, but mere papers masquerading as assets
(such as CDOs, synthetic CDOs and CDO Squared - toilet papers). Therefore,
so-called sophisticated "investors" were borrowing toilet papers to "invest"
in toilet paper assets!
Common sense tells us, and thinking naturally and in simple terms will
enable us to conclude, that only greedy people can be lured by such
con-games and that when gambling at such casinos, these so-called
sophisticated investors were not using common sense.
Common sense tells us that we, the remaining hardworking people should
not allow any government to use our tax revenue to bailout such reckless and
greedy b...@#st@#ds.
Common sense tells us that when gamblers lose millions at the Las
Vegas, Macau or Genting Highlands casinos, no government can justify and or
dare to bailout such stupid and greedy gamblers. We would vote them out of
office.
Common sense tells us that since all these "clever people" by their
reckless, irresponsible and fraudulent conduct have destroyed the economy,
they should be prosecuted and sent to jail and the keys thrown away!
Common sense tells us that a system that allows such frauds and
gambling should be banned and made illegal.
Common sense tells us that when common thieves rob a jewelry shop or a
bank, they are sentenced to long terms of imprisonment and whipped as well,
these sophisticated thieves should be likewise be whipped and sent to prison
for life imprisonment, as their destruction is a million times more
devastating than the common thieves!
Common sense tells us that when times are hard, we should be prudent
and thrifty to overcome and survive the hardships, so why are we encouraged
to borrow more and more and to spend, spend and spend?
Common sense tells us that when a shop is offering a discount, a
reduction in the price of a product, the shop-keeper is encouraging us to
spend and buy the goods.
Common sense tells us therefore, interest charges and penalty
interests are the cost of a debt / borrowings from the perspective of the
borrower and revenues and profits, when the debt is fully paid, from the
point of view of the lender.
Common sense tells us that it is not out of kindness that banks lower
interest charges. Like the shop-keeper, it is to encourage more borrowings.
More borrowings mean more debts and ultimately more profits for the bankers.
Common sense tells us that we should not get into debts unnecessarily
and not to borrow to purchase things that are not within our income and our
ability to repay.
Common sense tells us that we should not commit fraud and or be a
party to a fraud.
Common sense tells us more importantly, not to be greedy and lust for
material wealth.
Common sense tells us that we should be angry, very angry with the
so-called "sophisticated and up-right people" who commit fraud and the
regulatory authorities and political leaders who cover-up their crimes.
Finally, common sense tells us that we should take action to put a
stop to these crimes and scandals.
Please use common sense and do something before it is too late!
Matthias Chang is a prominent barrister and author based in Malaysia.
His website is www.FutureFastForward.com
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