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View Diary: David Stockman: “get out of the markets and hide out in cash” Corruption Of Capitalism (122 comments)

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  •  Ya think that's a bug? (7+ / 0-)

    Or is it a deliberate feature of the system designed to separate us rubes from our cash and allow the bankers to gamble with our money, and lose it, at almost zero risk to themselves?

    Years ago, it used to be that you put your money in a bank where it was guaranteed unless the bank failed completely, and FDIC was supposed to fix that risk. You were paid a percentage on your money, guaranteed. Remember all the stories from the fifties that talk about the miracle of "compound interest?" Put a penny in the bank and come back in a hundred years and you're a millionaire! Not anymore. These days, if you leave any money in a bank more than a few years without touching it, they first cut off your interest payments, then they confiscate the money as an abandoned account. Often without even contacting you.

    But even the idea of a guaranteed return is a memory. The idea used to be that we were loaning our money to the bank to invest. We got our guaranteed return, our "compound interest," as our part of the deal. The bank got to keep whatever it could earn over and above that guaranteed return. But now, NOW YOU are a "risk taker" (doesn't that make you feel all manly and cool?) and your money is gambled with to see if they can make a profit on it. There is no longer any guarantee over a mere pittance of perhaps 1/2 a percentage point on "savings." Everything else is perpetually "at risk" at all times. They still only give you a few percentage points of the earnings no matter how much they make on it, but the return is in no way guaranteed.The result is that we mere mortal are making no more profit on our money than we did in the 50's, and often much less,, but every time the bankers fail at their jobs WE are the ones who pay the price. It's only ever OUR money at risk, never theirs. Their profits are still guaranteed. If not in the market, then by the taxpayers.

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