Economic Crises and Why Everyone Suffers Except Bankers

Part 1. A Financial Pyramid Based on Credit

During crises, everyone suffers anyway, don’t banks risk themselves by being the triggers of crises? Not at all.

Let’s not forget that it was the usurers who, several centuries ago, planned and successfully implemented the current global financial system. So there are specific measures to assist banks affected by the crisis that “honestly” operate according to the established (Finntern) rules, regularly paying the “mandated” amounts to their central banks, which in turn transfer them to the Federal Reserve System (FRS).

Thus, the causal relationship between the core of the global capitalist system — credit money, based on the extraction of interest, and cyclical crises is obvious.

Under the control of central banks, there is an interbank credit market. During minor crises, banks experiencing liquidity problems can easily borrow money from other banks (at interest, of course). If the crisis is more severe and a so-called “crisis of trust” arises between banks themselves, the central banks intervene directly.

Central banks, which have the status of “lender of last resort“, if necessary, immediately organize so-called “stabilization” loans to “systemically important” banks to restore liquidity.

The amounts can be simply astronomical, which no central bank would ever allocate to save real sector enterprises. Moreover, not all citizens are aware of the partial reserve system, which allows commercial banks to “issue” little-secured money for lending. And even fewer people delve into the depths of the insurance system itself. In Russia, the Agency for Insurance of Deposits (ASV) operates. The total amount of the Agency’s insurance liability for the first quarter of 2024 was about 500 billion rubles.

If the crisis reaches incredible proportions (as in 2007-2008), the Federal Reserve System, being essentially the central bank of central banks, can afford to conduct even unaccounted issuance of cash dollars. At the same time, there are practically no risks.

Firstly, the Fed is “its own director”, and no one has ever managed to verify its activities, despite the periodic efforts of American congressmen. Secondly, with the mass of US dollars circulating around the world, the chances of encountering an “American” with the same series and number are practically zero. And if this chance does occur, see “firstly”. However, in most cases, the FRS’s guarantees are enough to solve the liquidity problem anywhere.

In conclusion of the topic of man-made crises and the role of usurers in their emergence, it can be summed up that all this is characteristic of the so-called market economy, based on interest-bearing credit. And more broadly — of the capitalist economic model, where the core (and the meaning of life) is profit extraction. This is precisely the reason for the emergence of crises in the form of the collapse of financial pyramids, either overtly or covertly. In the USSR, which implemented the anti-capitalist (Stalinist) economic model, where the focus was not on profit, but on reducing the cost of final products, there were no such crises, and they could not be. The ruble was stable, inflation was around zero, annual development rates were not inferior even to those of China, Vietnam, and India, today’s leaders in GDP growth rates (among large countries). And the problems in the late USSR began precisely with a departure from the principles of this model, a rejection of its traditional values, and an attempt at convergence with the “best” of capitalism.