Written by Jeff Nielson Wednesday, 05 March 2014 12:58
For the past three decades; we have been subjected to the mythology that when the Rich get richer “it’s good for the economy”. This mythology has been debunked in several of my own previous commentaries, most notably The Pareto Threshold.
In that piece; it was explained that wealth-inequality was not merely “harmful” to economies, but rather when it becomes too extreme it literally destroys economies. This is all just simple arithmetic/economics. Proof of this principle requires nothing more than simply visualizing an inverted “wealth pyramid” – where a small number of people at the top hold all the wealth, and the masses hold nothing.
Obviously such an economic phenomenon is the literal representation of “instability”, reflecting a hollowed-out economy which cannot possibly survive. Conversely, elementary economic theory (i.e. the “marginal propensity to consume”) proves that an economy must be healthier/more robust if most of the wealth is held by most of the people.
Now the International Monetary Fund, one of the central institutions of the Western banking empire, has come out and stated the obvious. Nations with higher wealth-inequality consistently exhibit poorer economic performance than nations with less inequality. We have had empirical proof of this for decades.
Year after year, decade after decade; the Scandinavian nations of northern Europe, with centralist governments and economic policies, consistently rank at the top of all international surveys of “quality of life”. Many in the mainstream media (and the Right-Wing media, in particular) mistakenly label these governments as being “socialist”. However this cannot possibly be true.
It is these same banking institutions and “right-wing think-tanks” which tell us all the time that socialism destroys economies. However, the centralist governments of Northern Europe also rank at the top of all international surveys on prosperity. The societies with the least wealth-inequality in the West are also its strongest economies.
While the “more capitalist” nations in the West (dominated by Western banking) all have debt-to-GDP ratios approaching 100% or worse; these Scandinavian nations have debt-to-GDP ratios of 25% or less. Surely the right-wingers at Fox “News” don’t want to assert that all of the best-managed (and most-prosperous) economies in the Western world are “socialist”?
Why is a commentator who generally specializes in “precious metals” even covering the subject of wealth-inequality? The glib answer would be that I first spotted this news at Kitco Gold. The more thoughtful answer is that it provides us with yet more illumination on our Lemming Economies.
Wealth inequality is bad for economies. Too much wealth-inequality is fatal for an economy. Wealth-inequality in (most) Western societies is at the worst extreme in history, and continues to get worse by the day. Conclusion: all these Lemming Economies will soon go “kaboom”, and so we hold gold/silver in anticipation of this collapse.
What makes analysis of wealth-inequality so productive is that it tells us why our economies are about to go “kaboom” (contrary to the daily mythology from the Corporate media). It also tells us how to prevent our economies from going “kaboom” (assuming anyone in our Traitor Governments still care).