An Absence of Logic: The Social Impact of Market Speculation

Legalised Robbery: 'Stock' Exchange Speculation

Speculation in financial markets has undergone significant evolution since its inception. Historically, investments were primarily driven by the underlying value of assets, with traders focusing on long-term growth. However, the contemporary landscape is marked by a shift towards short-term gains, characterised by speculative trading practices. This transition can be attributed to multiple factors, including an abdication of common sense and morality, creating a casino complex on the back of the industrial revolution and common all garden greed.

The stock market in original form where viable commerce of products and services occurred was innocent enough. This swiftly transmogrified into something all too sinister because people with loose change wanted to make gains without adding anything of value to the table apart from the stack of roubles. As the predator class became more involved they created rules, and fees and basically rigged the game. That's called monopoly, not capitalism, and is not only immoral on its face, but in many cases, illegal. By this time however, the 'markets' already had a flawed corollary, the fractional reserve banking system so all the classic anti usury laws had long receded. To be clear, the stock market became a way to lighten the pockets of the productive classes as wealth flowed ever upwards. It is intellectually offensive that economists legitimise this gambling racket in which the house always wins. If you consider what happens when an item soars in cost before it ever gets to market as shareholders demand increasingly greater dividends. The item stays the same, the labour required to make it remains the same but without oversight the cost to the buyer is subject to exponential inflation. Inflation is the cause of many evils such as poverty, exploitation and injustice.

The advent of digital technology revolutionised the trading environment, enabling rapid access to market information and trading platforms. High-frequency(HF) trading algorithms and online brokerages have further monopolised the stock market because although they allowed a broader spectrum of investors to engage in the game, unbeknownst to most, these are downline 'minnow' investors; The real HF trades take place before the markets open - and it is this hidden event that fixes value and trade for whole nations. This second tier accessibility has led to a surge in speculative trading, as individuals aim to profit from minute fluctuations in asset prices rather than holding onto investments for long-term appreciation.

Moreover, psychological factors play a crucial role in the rise of speculation. The tendency for investors to exhibit herd behaviour, where they follow the actions of others, has intensified in recent years. The proliferation of social media platforms has further amplified this phenomenon, as information—or misinformation—can spread rapidly, prompting investors to make impulsive decisions. This shift towards speculation over traditional investment principles has raised concerns among economists regarding its impact on market stability.

The implications of this speculative environment are far-reaching. While speculation can enhance liquidity and price discovery, it also introduces volatility and elevates the risk, market bubbles and inflation. Such divergence from the original purpose of investing can lead to adverse economic consequences, affecting not only individual investors but also the broader financial system. In examining this rise in speculation, it is evident that the financial landscape disturbs sustainability and economic stability.

The Role of Valid Products in Economic Prosperity

The importance of creating valuable, tangible products cannot be overstated when it comes to driving economic growth and societal advancement. Historically, economies that thrive are those rooted in productive enterprises, where innovation and practicality take precedence over speculative trading. Such a shift is necessary, particularly in today's financial landscape, which often prioritises rapid gains over sustainable progress.

Consider the industrial revolution, where the development of practical goods transformed societies. Innovations during this era, such as the steam engine, not only led to mass production but also stimulated employment, improved living standards, and fostered technological growth. These valid products were instrumental in creating a robust economy that benefited a broad demographic, ultimately laying the groundwork for modern economies.

In contrast, speculative trading frequently leads to economic instability. The 2008 financial crisis serves as a poignant reminder of the pitfalls associated with prioritising speculative investments over solid economic fundamentals. Many investors were drawn to products that lacked intrinsic value, resulting in a catastrophic collapse that reverberated across global markets. Such volatility amplifies financial uncertainty, disproportionately affecting those reliant on stable job markets and productive enterprises.

Furthermore, a focus on tangible products nurtures entrepreneurial spirit and fosters creativity. When resources are allocated to developing new, useful products, rather than volatile financial instruments, societies can harness human ingenuity effectively. This focus creates a ripple effect that encourages investment in education, infrastructure, and technology—key components of a resilient economy.

Ultimately, prioritising the development of valid products is integral to economic prosperity. A society that values and invests in substantial innovation is better positioned for sustainable growth, reducing reliance on speculation, and ensuring long-term benefits for all its members.

Artist: Stealers Wheel: Track: 'Stuck in the Middle with You': https://www.youtube.com/watch?v=ofs_GyQXJ9k

Artist: Pink Floyd: Track: 'Wecome to the Machine': https://www.youtube.com/watch?v=TAUdfj_fWFs

The Fed Reserve, Wars, & Erosion of Public Wealth

The Federal Reserve, established in 1913, functions as the central bank of the United States, primarily aimed at managing monetary policy, stabilizing prices, and regulating the banking system. However, its role extends beyond these objectives, intertwining closely with government military expenditures and their repercussions on public wealth. As wars necessitate significant financial resources, the interplay between military spending and the Federal Reserve's monetary policies often leads to profound economic consequences.

Historically, the funding of wars has been reliant on public finances. The Federal Reserve, by facilitating government borrowing, aids in the financing of military endeavours, which in turn results in heightened national debt. This cycle of debt accumulation has a long-lasting impact on public wealth. As government funds are diverted toward military activities, essential investments in infrastructure, education, and social services suffer. Consequently, the societal fabric begins to fray, as resources are 'leeched' from vital public sectors.

Moreover, the economic strain induced by military expenses leads to inflationary pressures. When the Federal Reserve opts to keep interest rates low to support government borrowing during periods of conflict, the result can be increased monetary supply that devalues currency. This phenomenon disproportionately affects everyday individuals, engendering a gradual erosion of purchasing power, deeply impacting financial security. However, it would be a mistake to think this is all incidental, it is part of the 'boom, bust 'n war cycle' calculus that cancels out, under cover of war, all manner of economic impropriety that leads to that point. [https://www.youtube.com/watch?v=5hfEBupAeo4]

The implications of these dynamics extend far beyond economics, as they create a dependency on governmental structures and diminish critical thinking among the populace. The reliance on military funding obscures the importance of civic engagement and informed decision-making. Thus, fostering a community characterized by common sense and scrutiny of financial systems is crucial. By navigating these economic challenges with awareness, individuals can better advocate for public policies that safeguard the collective wealth of society.

The Consequences of Fractional Reserve Banking

Fractional reserve banking is a fundamental component of modern financial systems, wherein banks are required to hold only a fraction of their deposits as reserves. This practice allows banks to use the remainder of the deposits to issue loans, thereby creating fictional money in the economy. The system operates on the premise that not all depositors will withdraw their funds simultaneously. This mechanism can stimulate economic growth by increasing the availability of credit, which in turn influences consumer spending, business investment, and overall economic expansion but inevitably leads to stagflation.

The banking sector is therefore a purveyor of fraud because it stretches this dubious practice to the point where it loans out multiples of the original loan value without any assets to back it. Consequently fractional reserve banking carries substantial implications for inflation and economic stability. Central banks to claim manage inflation and stabilise the economy, utilise interest rates as a tool. Lowering rates encourages borrowing and spending but fuelling inflation, while raising rates can curb spending and stifle economic growth.

Ethical considerations surrounding fractional reserve banking are essential. The practice creates wealth disparity, as those with access to credit benefit disproportionately compared to those without. Additionally, the reliance on credit can lead to financial crises, particularly when the banking system faces widespread withdrawals or defaults on loans. Such crises reveals a lack of common sense in financial practices, as overly optimistic lending and borrowing behaviours can escalate into significant economic downturns. Ultimately, understanding fractional reserve banking is crucial in recognising its consequences for society, highlighting the importance of financial literacy and responsible fiscal management to prevent future disparities and crises.

Artist: Pink Floyd: Track: 'Wish You Were Here I-IV': https://www.youtube.com/watch?v=TAUdfj_fWFs

Anup is Media and Design expert for Pearl Bliss Homes. His interests are: art, history, current affairs, philosophy, literature, the environment and humanism. You can comment on his blogs via email info@pearlblisshomes.com.

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