Mega-Trend: Financialization

There are three big underlying issues that are driving the world today’s economics. One of these is the trend of Financialization. Today if you want to make money there are two ways either you can make little factories and buy farms and improve productive capacity and buy ships and going catch fish, this is the real sector, but the other way is to invest in the stock market or they buy land. Now with a lot of money is invested in land the prices will increase and a lot of money is put into stocks the stock prices will increase. Suppose we all start buying stock and its price is doubled so our wealth has become doubled but nothing is happened with the productive capacity of the economy. So, we can make the largest amount of money by doing things, which are completely useless and that are the case today. There is no relationship between the amount of money you can earn and the service, the value that you are providing to the economy. This divergence has started since deregulation of the financial industry which started in the 80's.

In 1999 the Glass-Steagall Act which prevented the gambling in the banks was repealed and in 2007 the Global Financial crisis as banks started gambling like mad and they collapsed. The thing is that even post crisis nothing has changed, there were a lot of attempts made in the USA to create regulations but this time they did not succeed because the wealthy people have bought out the congress. It has called the regulatory capture. As a result of Oil Crisis there has been no regulation and it is continuing, the financialization, the people who have money can make money more money without doing anything productive, and they have so much money they can buy out the rest of the world. They are buying up everything what's called a shopping spree; these people are buying a factory and the fine and businesses and steel mills and everywhere. They captured the revenues so the laborer gets very less, the people who are actually running the business they get very little and all of the profits goes to the capitalist it's like a giant leech which is sucking the blood from the economy. This is continuing process people recognize it and many people have complained about but the power is all in the hands of the rich and the nothing has been done. Big financial analysts said that the next crisis will happen because nothing has been done to prevent it. The interesting thing is that the crisis hurt everybody, but it don't hurt the super-rich as when the Global financial crisis occurred then trillions of dollars was paid to the bankers and they went on with huge bonuses in their pockets and were not hurt at all by this crisis. So they are quite happy they don't want to prevent the next crisis since it doesn't cause them any harm it causes the whole of 99% of the population.