Which means the entire derivatives market,
America really need to stop putting troops outside of the US IMHO
You do know that those two are intimately linked and easily cured?
The size of the current US military is way beyond what the tax base of the united state could ever support.
I forget the percentage of GDP that united state military spending comprises. but even without all of the entitlement schemes subsidies and restrictions and fe'ral pay roles being added on to it... if it was funded by taxes alone, it would crush the actual productive side of the united state economy.
so, HTF is it funded?
The first stage was a monopoly of money production and legal tender laws. that hasn't always gone smoothly, American attempts at paper money have gone badly awry in the past, for example the "continental dollar"
then a central bank, to coordinate the inflation of the money supply (it's no coincidence that American entry to WW1 followed so soon after the foundation of the fe'ral reserve), a corrollary of that is to ban the holding of sound money, which FDR achieved by banning the private ownership of gold
The next stages were the Bretton Woods agreement - where united state dollars were to form the reserve holdings for all other countries central banks, this created a large overseas demand for paper dollars and dollar denominated bonds. Other arrangements like the "petro dollar" (the american military will defend any oil producer that agrees only to trade its oil for dollars) also creates demand outside america for dollars
and the reneging on the Bretton Woods Agreement. Way more paper dollars had been printed than could be redeemed with the american holdings of gold bullion at the nominal exchange value of $32 / ounce of gold. - although only central banks could redeem their paper dollars for gold, the French central bank (very wisely) insisted on doing so. LBJ, who had continued and extended JFK's Keynesian expansion of the money supply, suspended the redemption of paper into gold in around 1968, and Nixon, who was still trying to use keynesian policies to inflate the economy out of what had become stagnation, fully reneged on Bretton Woods, by removing the link to gold in around 1971. The American dollar had by that time become the most accepted medium of exchange internationally, and through habit, it has continued to be.
The united state had then achieved the ability to print paper or enter digits in a computer - and to buy real goods and services from almost anywhere in the world with those digits
and - because there was an overseas demand for that paper and those digits, the printing could continue to a far greater extent without the dilution of purchasing power being as noticeable at home as it would have been if that paper had just been circulating at home (check out hyper inflations - Venezuela currently doesn't even have sufficient acceptable money to pay for the printing of more hyperinflated bank notes to keep its hyperinflation going!).
There is no magic in the trick, it just works as a sly way to invisibly transfer purchasing power away from all users of the dollar and to the printer of those dollars, and to a lesser extent to the early recipients of the dollars who get to spend them before the price of goods increases, due to the increase in money supply.
The banks are early recipients of that new money, and through the fraud that is fractional reserving, they create the illusion of even more money*
The illusion of more loanable funds, reduces the interest rates, and, in order to make returns, pension funds and the like, go to ever riskier investments (which carry a high risk premium)
eventually people's pension savings are going into bets made on the outcome of other bets (derivatives).
The simple cure?
Sound money
actual physical gold and silver coins - learn how to identify the real ones, and start accepting them and start using them ( in defiance of laws against the practice)
Bitcoin appears to have been a very perceptive anarchist attack on the monopoly of money production, and has many of the advantages of gold, but with the advantages of easy electronic transfers that completely bypass the crony banking cartels.
The united state has been very aggressive in attacking any threats to the paper dollar
Sadam Hussein, was offering to accept euros for oil - and the united state promptly took "democracy" to Iraq
Murmar Khadaffi was proposing a gold dinar for trade in Africa - and Libya promptly received "democracy" as well
In a sound money economy - fighting wars becomes much more difficult, as a government can't just print the money to fund the war
and "financial services" becomes largely redundant, as the interest rate once more becomes a price arrived at on the market between savers and borrowers.
Russia, China, India and several other players, including Iran are currently engaging in a process that they hope will lead to "de-dollarisation" and then get to print their own wealth, there is also suspicion that the IMF wants to be the world monopoly money counterfeiter.
There are far more of us than there are banksters and politicians:sneaky:
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* How banks create the illusion of more money than there really is