Federal Reserve Casino – "Place your debts!"

Imagine for a moment you have invented a new board game, let´s call it "Bankerscam" just for fun. The idea of the game is to see who can make the most money from nothing. Each player is given a certain amount of paper money at the start, but they can print more anytime they like.

A player can increase their wealth by giving loans and making a profit from the interest. They can manipulate the stock market to bring prices down, and buy the companies, whose value has fallen to a ridiculously low level, at a fraction of their true price. They can even give credit to the public to buy property (even if their incomes don´t warrant such a loan) and then create a crisis so that they lose their homes to the lenders. Normally this would be unprofitable, unless you have just bought the company that made the loan at a bargain price. Later in the game you can allow things to return to "normal" and make a further profit on all the assets you gained earlier (as prices rise).

Sounds like a great game, doesn´t it? There is just one problem, it has already been invented! The only difference is that this is not a board game, this is for real.

The Federal Reserve does print money (without a reserve) and can steer the economy in any direction it wishes, pushing stock prices up or down whenever they like. This "private" bank, run by an "Elite" group of individuals has immense power, not just in the US, but all over the world. But how did these people get to control the financial world and continue to profit from events that they can create? If someone (a member of the public) made a profit from buying shares with "insider" knowledge, they would end up in prison, what´s the difference?

At the moment it is perhaps not important how or why the Federal Reserve got this power, but what we can do to change this situation. The most obvious solution is to take this "organization" out of private hands, which should have been done a long time ago. It will then be necessary to make sure that all the money printed can be backed up by some tangible asset, such as gold.

This may take some time of course and some stability in the Stock Markets is needed now.

One solution (which may seem drastic to some) is to suspend all trading for a certain period of time, until some adjustments to the trading system can be introduced.

The purpose of the Stock Market (originally) was a good one, providing new and existing companies with an opportunity to raise money for expansion, rewarding investors with dividends and a growth on their investment (if the company did well and their shares increased).

Unfortunately, just like the Fed, the Stock Market has become nothing more than a "Casino", where people put money in and out looking for a fast buck. There is no longer any difference between a casino and the Stock Market, except for the names of the gamblers (speculators and punters). Unlike the Federal Reserve whose "house rules" make it impossible for them to lose, the Stock Market can destroy not only the investors and the companies involved in this game of chance, but the public as well when companies go out of business (creating unemployment and credit problems).

With the present system, a company´s worth is dictated by its stock value, which means even the best company can go out of business if its shares fall dramatically, regardless of whether it is profitable or not.

There are perhaps two ways in which this can be avoided. The first would be to restrict the purchaser of shares from selling them within a certain time period, thus eliminating the get rich quick speculator. Or alternatively, introduce a different method of valuing the shares. This could be done by estimating the real value of the company and dividing this by the number of shares issued. For example: If you bought one share at $10 (when the company was valued at $100 million), this would then be worth $20 if the value of the company doubled.

Such a system would still require Stock Brokers (or agents) to buy and sell shares for their clients, with the usual commission fees, but the value of the shares would be related to the real results of the companies involved. Shareholders could still sell their shares at an above market price, if there is a buyer willing to pay this figure (very possible for sought after shares), or sell at a lower price (and take a loss) if they wish to sell their shares quickly.

Investors can still make good profits, but they are more likely to choose companies that have a real chance of succeeding, and not one day wonders.

This is obviously an over-simplified suggestion, but in principle it could work, if those involved can be persuaded to adopt it (in some form). Clearly the bailout is not working, as most can see that this is only a temporary solution (benefiting the usual people again) and the "gamblers" will continue to destabilize the Stock Markets by "cashing in" their profits as soon as the shares look like they may be recovering.

If we can eliminate the gamblers and manipulators, stop printing money that can not be backed up by tangible assets, and stop encouraging people to spend money they don´t have, the economy will quickly recover. However, that would put the financial "criminals" out of business, so it is unlikely that we will see that happening. Unless of course the people bring this change into force, but that doesn´t seem very likely either!

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