Because I´ve been hearing about a global economic depression, and I lacked of elements which justify the origin and development of that economic crisis I decided to investigate and write something about it. I do not pretend to be exhaustive but I felt the necessity to share my vision about my investigation. What is the meaning of word Crisis?
Part of the financial profit in a postmodern stage of capitalism, allows banks (among others individuals and corporations) to accumulate exorbitant amounts of money, In order to have more revenue the corporations started to lend that capital because they are looking to increase the amount of benefits. These loans were granted to agents of different economic conditions:
•For those who have the capacity to pay.
•For those who don´t have the capacity to pay but have properties that can be mortgaged.
•Others who can not pay their debts and do not have any type of property or possession to support its debt.
In this scenario, banks presumed to get back that amount of money borrowed (that one could be received or not), and they were waiting for that capital that according with their dispositions would continue to grow. Meanwhile, they began to make business plans with these probable amounts of money (speculative capital).
Then, the owners of speculative capital continued doing business because they were selling these promeses to be paid, in that moment speculative capital was like money and generates profits for those who sold it and for those who bought it, because this last group were waiting to have profit in the future. However, crisis occurs when banks(that had acquired large amounts of speculative capital) want their money back, and they find that not everybody had the capacity to pay.
The big companies that bought and sold speculative capitals look for state intervention to recover the amount of capital which they hoped to have. However, this intervention has not been sufficient and has generated a number of consequences:
•Layoffs and Slowdown in the economy (prices can not rise and economies can not grow)
The nation's economic system is based on loans, those with the most money- which is concentrated in a few private hands - control the global banking system and turn it into a super individual state controlled at pleasure and provide loans for profit through interest. These are (the owners of banks) who are responsible for producing the money, that money is provided to the government or the private sector and expect it to be multiplied. That debt must be paid including two components: borrowed capital and interest.
In that case, the lender has that virtual amount, and the money that is supposed to be received must come from somewhere and if it´s not paid by the debtors, then the big corporations claim that the State by taxpayers, help them to maintain financial stability.
The economic crisis has been present in different sectors of society, but the system has presented the title of crisis at this time, because it has afected the large capital (minorities) and not those who have always been in permanent crisis (majority). In other words, the nature of crisis is selective, because it depends of who is affected. Those who now make us share the crisis, are the same that defends the private character of the profits when there is sucess in the free market.