This is part two of a report I wrote for subscribers of Crisis & Opportunity in October 2018. Part one appeared yesterday. You’ll get part three tomorrow.
This essay is about globalisation. Sounds boring, right?
Not this one.
It’s about globalisation as you may have never thought about it.
At least, I hope it makes you think…
Globalisation is a loaded term.
Benignly, we often think of it as a natural progression…the way of the world. Technology and globalisation go hand in hand. Technological developments make the world smaller. They break down barriers, and bring us all closer together. One world, living in harmony.
That’s the brochure version.
In a more malign sense, critics of globalisation see it as a way for multinational corporations to increase profits and exploit labour.
While there is truth in both arguments, there is much more to it than that.
Much, much more…
The truth of the matter is that the ‘elites’ have planned the path to globalisation for a very long time. The overarching aim of this plan is ‘centralisation’. That is, centralisation of government, centralisation of money issuance (banking), and centralisation of information (corporate media).
Centralisation is about power and control. A ‘central bank’ controls a whole banking system. A centrally planned government controls a whole economy. A centralised, international organisation (like the United Nations, the World Bank, The International Monetary Fund, etc) takes control from sovereign governments.
The more centralised something is, the more power that resides in the centralised apparatus — the government (or the elites that hold sway over the government) — and the less power that resides with the people.
While the path to globalisation started over 100 years ago, it has really picked up in the last few decades.
As I said, globalisation is often associated with progress. And there can be little doubt that standards of living have increased all around the world in recent decades.
But there is also ‘that which is unseen’, that must be taken into account to gauge the real effectiveness of this process known as globalisation. When you look at this darker side of the equation, you’ll gain a better understanding of the globalisation project, and who the real beneficiaries are.
To do so, let’s look at the results of globalisation from the vantage point of the average American. I’m using America as the example here because it’s the largest economy in the world and is the global centre of money, power, information and politics.
Globalisation — Cui Bono
According to the Pew Research Centre, real wages growth in the US has gone nowhere over the past 40 years:
‘…despite some ups and downs over the past several decades, today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. And what wage gains there have been have mostly flowed to the highest-paid tier of workers.’
In other words, workers have not benefitted at all from 40 years of economic ‘progress’. Instead, workers have seen jobs disappear to cheaper wage countries, replaced by less secure, part-time work.
An outgrowth of that is the rise of the two-income household. A few decades ago, the average family could live comfortably on one wage, with one parent taking on the important and difficult role of raising children.
Now two average incomes are required to service the debt on an average priced home. Despite a lack of growth in real wages, real house prices have increased considerably. This means people have progressively had to borrow much larger amounts for the same level of shelter/housing.
According to the Federal Reserve’s Flow of Funds data, total US household borrowing (mortgage and personal debt) has increased from US$1.42 billion in 1980 to US$15.4 trillion as at 30 June 2018. That’s an increase of nearly 1,000%!
As a percentage of the size of the economy (a better measure of the relative growth in household debt) it has gone from around 50% of GDP in 1980 to nearly 100% in 2007. Following the 2008 credit crisis, household debt as a percentage of the size of the economy is now around 75%.
Bigger debt loads, poor job security and two people in the workforce places immense pressure on the traditional family unit. As a result, you’ve seen a big increase in divorce rates, single mothers bringing up a family and trying to provide an income, and the outsourcing of childrearing to day care centres and schools.
What happens when you get a breakdown of the traditional family unit? The welfare state steps in to the rescue. The size of government grows, as it must ‘look after’ more of its citizens. That means government spending increases, which in turn means an increase in taxes and borrowing. This is another example of the centralisation of power.
According to usgovernmentspending.com, government spending at the start of the 20th century was less than 7% of GDP (Gross Domestic Product). After trending higher for the past 100 years (and spiking for both world wars) US government spending now represents around 35% of GDP.
In other words, government spending now accounts for more than one-third of US economic output. In order to produce that output, the government must first tax labour and capital. That is, it must tax productive enterprise in order to carry out its spending programs.
Can you imagine how much more productive the US economy would be if the government (a notoriously inefficient organisation) wasn’t such a huge part of the economy?
This didn’t happen by accident though. Big government and bureaucracy is a central tenant of globalisation. In order to move to a globalised world with a centralised power structure, big government needs to exist to ‘protect’ its people.
How did it get to this point though? How could we have let it happen?
It happened because it was designed that way.
To explain, let me ask you another question.
Who do you think has been the biggest beneficiary of this move towards globalisation and centralisation of power? The biggest one, by a long shot, is the banks.
Cui Bono? The banks…
Banks create credit. When they do so, it becomes money in the economy, and is secured by an asset, which sits on their balance sheet. The more credit/debt/money there is in the world, the greater the amount of bank assets.
As Mayer Rothschild said, if you control the supply of money, it doesn’t matter who makes the laws. When you control money, you can buy the lawmakers.
Toward the end of the Gilded Age in the US (1870 to 1900), the bankers increasingly understood this rule. During this period the US created great wealth. It was the time of the ‘Robber barons’, J P Morgan, and J D Rockefeller.
With wealth comes increasing banker power. But the US didn’t have a central bank at the time. The banking system was on the hook for its own poor lending decisions. If it inflated credit too much in the upswing, it could go bust in the downswing.
As a result, the bankers colluded to create a more ‘elastic’ money supply. They wanted to be able to create lots of credit in the upswing and not have to worry about customer withdrawals in the downswing.
This worked out very well for the bankers. And that legacy continues to this day.
Tomorrow, I’ll show you how the bankers stacked the odds in their favour.
PS: The truth behind Australia’s ‘miracle’ economy exposed. Download your free report now.