People's first reaction to change is big reaction then they settle down and bear it. The rhetoric you get now is their first reaction, expressing the change in the most dramatic terms because change is new to them but they quieten down as they get used to it. If you woke up and found the skies were now red instead of blue, your first reaction would be strong, but after a while you would get used to it.
As I said before, the drop in confidence has removed something like 5-10% of world apparent wealth (the figure they put on wealth) which is not a big difference. Of course, this is trillions, which sounds very dramatic and frightening, (which sells newspapers) but as a percentage, it is not large. It will drop to something around 15-20% at the bottom of under-confidence, before realism will reassert itself and bring the under-confidence back up to a realistic figure, between the peak and the trough.
And all the time this is going on, the substantial wealth is undiminished.
The thing is, people forget to look for the whole picture. They mistake part of the picture as being the whole reality they mistake jigsaw puzzle piece for puzzle picture. One piece may be dark, and they think the picture is dark because the brighter parts of the picture are not in view from their perspective, are not in their consciousness "omg! Loss of trillions! The sky is falling!" but no.
You just have to make a big noise around an hypothesis long enough and people will take it for truth. Throw a smokescreen of words and people will shout fire. Combine inadequate education in fallacious reasoning, the assertive overconfidence a phd gives some people, the people's na????ve reliance on phd's and government and the media's profiting from sensational news"and you get universal untruth. Add the universal hatred of being proved wrong and you have untruth set in concrete.
When you have a little pay injustice, then something like 40% of people will be slightly overpaid. As the pay injustice grows, the top overpay grows and the percentage of overpaid shrinks. The more extreme overpay (which is now 100,000 times average pay) takes more underpaid people (99% are currently underpaid) plus more extreme degree of underpay to finance it (we now have 90% of people on 100th to 10,000th of average pay). That is the point, and no financial crisis changes that.
Also, volatility in markets is proportional to pay injustice. More power in fewer hands means more power to make huge bubbles and be way above the law, buying the law, owning the law, making the laws, doing exactly as they please, without any checks or scrutiny. The price of liberty is eternal vigilance and vigilance about fairpay has been zero he's a billionaire, ah, how lovely, what a great man, we owe him a lot, we must be gentle with him, not anger or doubt him. God and the rich these are how people project their great desire for a good loving father to take care of them, so they can live thought-free, without civic responsibility. It doesn't matter how much he beats people, we don't lose faith in him because it would mean we had to think and seek the truth and keep watch. What luck for governments that people don't think (-Hitler)
Not all the leverage ratio of the banks will disappear in the correction. People who say that this thin-air money isn't real don't understand money. There is the substantial wealth (the trampoline) and there is the confidence level, which goes overconfident and then under-confident and then returns to level (the trampoline). In the panic, the confidence level goes below trampoline level and the trampoline pulls it back up. After the correction, the trampoline level for bank leverage ratio may be 20-1, 10-1, whatever, but not 1-1.
The bank leverage ratio creates money out of thin air, but this DILUTES all the money, it doesn't destroy all the money. Twice the money means each dollar buys half as much, and incomes double. The injustice arises between old dollars and new dollars getting paid in old dollars and buying in new dollars. The injustice in inflation is the government and banks stealing the national credit to back the dollars. The national credit belongs to the people who work, who have made the infrastructure, the substantial wealth that gives the nation its credibility or credit rating. The nation can sustain a certain level of debt without creditors losing confidence in that level of debt, and the level of debt is forced to return to a credible level of debt. There is never total loss of confidence in a nation, because there are still workers, and infrastructure and nature's bounty (land, sun, muscles, brains etc).
Like bubbles in a bath; the bath can sustain a certain level of bubbles (credit) because there is soapiness (infrastructure, systems) and there is agitation of the bathwater (work) but sometimes there is a big bubble that is going to burst and the level of bubbles is going to suddenly drop.
The stock market steadily grows with infrastructure growth. In a depression there is a blip of overconfidence and under-confidence, but it returns in around 3 years after the crash to the steady rising line (the trampoline).
So our numbers remain good (Note: This is referring to the figures we've used to calculate fairpay), only needing change when the government devalues the dollars, as in Zimbabwe.
The point remains that we should prevent individuals (wealthpower giants) being able to blow huge bubbles that temporarily affect the national credit and stability and order when they burst.
At the peak of the overconfidence before the correction, the national wealth is of the order of 5-10% overvalued. The correction comes when the overvaluation becomes large enough to be visible to creditors, who are of course keeping a sharp lookout; it is their money on the chopping block.
It takes time to work through the system, but if central banks double the money, income and prices double, too. Incomes and prices have been rising for many decades, for centuries. You know what prices and incomes were 200 years ago a penny bought you a good hot meal, incomes were $100 a year that sort of thing. $25,000 in 1930 is $300,000 now. Present global inflation at 4% a year doubles the money every 18 years. In the cold war years, there was about 10% a year inflation, which is why house prices rose 10% a year in that period. The inflation is a sneaky tax, which they used to finance the cold war, buy all those bombs. They then lend the new (stolen) money back to the people, making the people pay maybe three times the loan on a 30 year mortgage (stealing again) for the privilege of borrowing money the government (devoured by the superrich) stole by the inflation, which dilutes your dollars, making you need to borrow more.
Keynes said: governments can take money from the people through inflation. He should have said: governments DO take money"but he was going soft on the ruling class, to which he belonged. People find it very hard to believe the rich are thieves. The rich fool themselves and then fool the people, who they keep ignorant of economic realities by promoting economists who are fooled, who can't see what the rich don't want people to see. False arguments are cheaper than guns to keep the people suckers. It is only in the last 200 years that the ruling classes have allowed the people to be literate, and they haven't yet allowed the people to be economically literate. And the people are too unwilling to think their way through the smokescreen thrown up by self-deception and greed.
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