Bankers Own the World

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In every era, there are certain people and institutions that are held in the highest public regard as they embody the prevailing values of society. Not that long ago, Albert Einstein was a major public figure and was widely revered. Can you name a scientist that commands a similar presence today?

Today, some of the most celebrated individuals and institutions are ensconced within the financial industry; in banks, hedge funds, and private equity firms. Which is odd because none of these firms or individuals actually make anything, which society might point to as additive to our living standards. Instead, these financial magicians harvest value from the rest of society that has to work hard to produce real things of real value.

While the work they do is quite sophisticated and takes a lot of skill, very few of these firms direct capital to new efforts, new products, and new innovations. Instead they either trade in the secondary markets for equities, bonds, derivatives, and the like, which perform the 'service' of moving paper from one location to another while generating 'profits.' Or, in the case of banks, they create money out of thin air and lend it out – at interest of course.

Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.

~ Josiah Stamp – Bank of England Chairman, 1920s

Because these institutions and individuals accumulate vast sums of money for their less-than-back-breaking efforts, they are well respected if not idolized by most. Many of the most successful paper-accumulators are household names. They get invited to the best parties, are lured by major networks to appear on their shows, speak at the biggest conferences, and their views and words find an easy path to the ears of millions.

But this is more than just an idle set of observations for the curious. It's actually a critically important phenomenon to be aware of. For the current configuration of financially powerful entities has, at the tail end of a decades-long debt-based money experiment, achieved an astonishing concentration of power, money, and influence.

We raise this topic because our work centers on changing the conversation towards the things that really matter while there is still time to engineer a better outcome, and that requires illuminating the status quo and having a conversation about whether it needs to be modified. Unfortunately, those at the center of the status quo are not at all interested in having any such conversation, because all of their accumulated power depends on maintaining things as they are.

Money is power.

And history has shown that power is never ceded spontaneously or willingly.

The Network That Runs the World

A couple of years ago, I came across a study that has stuck with me ever since and I want to share it with you. It's really important if we want to understand the likelihood of a graceful transition for our current society into a future of prosperity.

Unlike prior studies seeking to quantify the degree of concentration of wealth and influence, this study simply pored through all of the available public data to build an empirical map of the network of power. Its findings are quite startling and deserve a bit of pondering:

Revealed – the capitalist network that runs the world

Oct 2011

AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters' worst fears. An analysis of the relationships between 43,000 transnational corporations (TNCs) has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

(...)

Previous studies have found that a few TNCs own large chunks of the world's economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy - whether it made it more or less stable, for instance.

The Zurich team can. From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company's operating revenues, to map the structure of economic power.

The work, to be published in PLoS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20.

What's more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world's large blue chip and manufacturing firms - the "real" economy - representing a further 60 per cent of global revenues.

When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

Just 147 companies control over 40% of the wealth of the entire network of companies. It should be pointed out that such a network does not have any borders and operates on a global basis, meaning that regional analyses – such as how Germany compares with the U.S. – might be less relevant than typically portrayed.

After all, if decisions being made by a tightly knit group of companies are being made to benefit a network that has no borders, then actions by the German or U.S. governments are only a part of the story. And perhaps a minor one, compared to those made the entities that actually control the real wealth of each nation.

It wasn't that many decades ago that a list of the top companies with the most wealth and influence would have been dominated by companies that produced real, tangible products – that is, those that created wealth by adding value to goods by transforming resources into products. Companies like GE, GM, IBM, Exxon, and other industrial giants would have been the wealthiest, because, well, they create actual wealth.

Today the top fifty companies in the 'super-entity' list of 147 from the above study is concerning. Out of the fifty, 17 are banks, 31 are an assortment of investment, insurance, and financial services companies, and only 2 are non-financial companies (Walmart and China Petrochemical)

The top 50 of the 147 superconnected companies

1. Barclays plc
2. Capital Group Companies Inc (Investment Management)
3. FMR Corporation (Financial Services)
4. AXA (Investments & Life Insurance)
5. State Street Corporation (Investment Management)
6. JP Morgan Chase & Co (Bank)
7. Legal & General Group plc (Investments & Life Insurance)
8. Vanguard Group Inc (Investment Management)
9. UBS AG (Bank)
10. Merrill Lynch & Co Inc (Bank)
11. Wellington Management Co LLP (Investment Management)
12. Deutsche Bank AG (Bank)
13. Franklin Resources Inc (Investment Management)
14. Credit Suisse Group (Bank)
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp (Bank)
17. Natixis (Investment Management)
18. Goldman Sachs Group Inc (Bank)
19. T Rowe Price Group Inc (Investment Management)
20. Legg Mason Inc (Investment Management)
21. Morgan Stanley (Bank)
22. Mitsubishi UFJ Financial Group Inc (Bank)
23. Northern Trust Corporation (Investment Management)
24. Société Générale (Bank)
25. Bank of America Corporation (Bank)
26. Lloyds TSB Group plc (Bank)
27. Invesco plc (Investment mgmt) 28. Allianz SE 29. TIAA (Investments & Insurance)
30. Old Mutual Public Limited Company (Investments & Insurance)
31. Aviva plc (Insurance)
32. Schroders plc (Investment Management)
33. Dodge & Cox (Investment Management)
34. Lehman Brothers Holdings Inc* (Bank)
35. Sun Life Financial Inc (Investments & Insurance)
36. Standard Life plc (Investments & Insurance)
37. CNCE
38. Nomura Holdings Inc (Investments and Financial Services)
39. The Depository Trust Company (Securities Depository)
40. Massachusetts Mutual Life Insurance
41. ING Groep NV (Bank, Investments & Insurance)
42. Brandes Investment Partners LP (Financial Services)
43. Unicredito Italiano SPA (Bank)
44. Deposit Insurance Corporation of Japan (Owns a lot of banks' shares in Japan)
45. Vereniging Aegon (Investments & Insurance)
46. BNP Paribas (Bank)
47. Affiliated Managers Group Inc (Owns stakes in 27 money management firms)
48. Resona Holdings Inc (Banking Group in Japan)
49. Capital Group International Inc (Investments and Financial Services)
50. China Petrochemical Group Company

(Source)

How is it that companies that produce nothing and only move digital representations of money from point to point now control far more wealth than the companies that actually produce the things that makes money useful at all?

Well, that's just how the system works. And this is something that nobody in power wants to talk about.

While we may decide that such as system is just, or unjust, or evil, or good, such judgments are merely the emotionally laden descriptors we might assign to a system that – by its very design – accumulates wealth from the many to the few.

This is why compound money systems have been tried and tried again, yet have never proved sustainable. Even ancient religious texts described them as requiring a Jubilee every 7 periods of 7, or 49 years. The Jubilee, of course, was a reset mechanism that wiped out the inevitable concentration of wealth so that things could start all over again with a fresh slate.

An imbalance between rich and poor is the oldest and most fatal ailment of all republics.

~ Plutarch

So it really should not be any surprise that banks, in particular – with their extraordinary power to lend money out of thin air (that's what 'fractional reserve' allows) and their unlimited-duration corporate lives – are able over time to accumulate, accumulate some more, and finally end up owning everything.

While we're not quite there yet, we are well on the way.

A few are beginning to notice the seeming unfairness of it all, such as the author of this recent article in The New Yorker:

The Problem with Record Bank Profits

July 16, 2013

What do these large dollar numbers have in common: $6.5 billion, $5.5 billion, $4.2 billion, and $1.9 billion? They represent the latest quarterly net profits made by too-big-to-fail banks—in order, JPMorgan Chase, Wells Fargo, Citigroup, and Goldman Sachs, the last of which reported its second-quarter figures before the market opened on Tuesday.

Five years after being bailed out by the federal government, the U.S. banking system hasn’t merely recovered from the financial crisis that brought it to the brink of collapse. It is generating record profits—the sorts of figures usually associated with oil giants like ExxonMobil and Royal Dutch Shell. During the past twelve months, for example, JPMorgan, the country’s biggest bank, has earned $24.4 billion in net income.

Let’s begin with trading. In the aftermath of 2008, there was much talk of banks getting back to basics, which meant concentrating on lending to businesses and households, and jettisoning many of their investment bankers, whose generously remunerated antics had helped to bring on the financial crisis. (...) In the latest quarter, Citigroup’s investment-banking arm generated more than sixty per cent of the bank’s net profits, and JPMorgan’s investment bank generated more than forty per cent of the firm’s net profits.

What exactly did JPM do to 'earn' more than $24 billion over the past 12 months? Did they build millions of appliances? Install thousands of critical power systems? Build and install high-definition CT scanners?

In fact they did none of these things, which are just three out of hundreds of accomplishments of GE, which reported a 12-month net profit of just $17 billion  while employing over 300,000 workers.

What JPM did was: trade on the markets, lend to speculators, and use its inside advantage to skim what it could off of the Fed's monthly $85 billion of free money. Not that there's anything illegal with that, but perhaps we should really be asking ourselves if this truly serves our society to anoint financial players with the privilege of walking off with the vast majority of our total national and global income.

Unsustainable Systems Ultimately End

The alarming growing wealth gap in developed nations is a predictable indicator of the obvious inequities involved in this system. Those not in the top 1% are finding themselves as modern-day feudal subjects – bound by debt or lack of property – to a global corporatocracy (corporations being the new aristocrats).

But the stability of this parasitical system begins to weaken quickly when the lifeblood it depends on begins to dry up. And that's when things can begin to go south in a hurry: a crack-up of the financial system, civil unrest, government breakdown – that kind of scary strife.

In Part II: The Indicators of Instability to Watch For, we discuss the 3 most important danger indicators to monitor. These are the areas where the cracks will first appear, and will give those watching closely advance warning to adopt extremely defensive financial, physical, and emotional positions.

The vast concentration of wealth into so few hands is creating systemic instability, and if it continues long enough, it will prove to be a fatal ailment of not just any one particular republic, but all of them.

Click here to read Part II of this report (free executive summary; enrollment required for full access)

This is a companion discussion topic for the original entry at https://peakprosperity.com/bankers-own-the-world/

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Welcome to the 'American Farm' - the sequel of 'Animal Farm'.
   'Bulls get slaugthered, bears get slaughtered, pigs make money'

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Banks have power because so many of us (me included) leave deposits on their books. As I understand it every dollar in savings leads to $9 in debt for some other sucker.  If enough people loose faith and either a.) quit paying on their debt or b.) make a run on the bank (doing both could be fun!) we strip the power from the banks.  It almost happened in 2008, but the world governments still had the legitimacy to prop the banks up a little longer.  Government legitimacy in my approximation is based on two things, the support of its people and a lack of competitors.  Well they still hold the power they will kill any competitors before maturity (think Occupy or the Tea Party depending on the color of your state).  Popular support of governments though is starting to show holes all around the world. It seems the fire is starting at the edges and burning towards the center.  Governments are going to have to spend ever more money to prop up less and less popular financial institutions, while simultaneously putting down popular dissent and fighting off ideological competitors.  Of course at Mr. Martinson points out this is helped along by both energy and ecological limits. During this time there are two important things to do.  First, learn to provide for yourself independent of bank money, government services and "free market" distribution. Second, stay out of the way and keep your head down.  This thing will run out of steam on it's own given time and being an instigator at a time like this apparently lands you in a Moscow airport waiting room.  Better to stay keep to yourself.

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The Josiah Stamp quote in this article reminds me of another - older - quote:
"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome will become bankrupt.  People must again learn to work instead of living on public assistance."

Cicero , 55 BC

 

Evidently for all our advancement, enlightenment and education we have learned absolutely zip in 2,000 years. History lessons are apparently redundant. It's a terrifyingly staggering confirmation of our species' stupidity, greed and recklessness, but perhaps most of all, of our collective weakness in standing up to a proven system of failure. We can't say we weren't warned about it time and again.

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Hi All!
Maybe its me being confused by please explain how can you draw a relationship that top 48 companies in finance are owning more than 40% of the wealth? 
All Investment Management and insurance companies (and to some degree large Banks) manage money of ordinary Ma and Pa. Life savings of common folk who earned it across their carreers, hopefully, doing jobs beneficial to society. How can you propagate Asset Mangement companies like AXA or CapitalGroup owning large chunks of economy when in reality its individual accounts in aggregation that do and money doesnt belong to them. They just "manage it". 
Thanks
 

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And maybe, just maybe Einstein was not exactly what we believe today. At least you get some interesting hits if you do a web search with this headline.
 

On another note.
I recommend "Dillon Read & Co Inc and the aristocracy of stock profits" by Catherine Austin Fitts.

http://www.dunwalke.com/contents.htm

A quote: One of my favorite Dillon Read officers was the son of a former Dillon chairman and, thus, remarkably wise about the ways of the firm. I sought him out after a Birkelund temper tantrum and said that Birkelund was not at all like a “Brady Man” and that I was surprised at Nick’s choice. My colleague looked at me with surprise and said something to the effect of “Brady did not choose Birkelund. Birkelund is a 'Rothschild Man'.” I then said something about Dillon being owned by the Dillon partners, so what did the Rothschild’s have to do with us? My colleague rolled his eyes and walked away as if I was an interloper out of my league among the moneyed classes — clueless as to who and what was really in charge at Dillon Read and in the world.
 
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Back in the day, when banker skim was around 1-1.5% of the economy, banking was a useful service allocating capital.  Kind of like a utility - providing water, electricity or in this case, money to keep society running.  Useful, and necessary.
Today banking's almost complete control over the levers of power come from the money (5.2% of total GDP as company profits - does not include salaries and bonuses!) they make.  And that I believe that money stems from the amount of debt in the overall society.  As debt has grown in society, so have banker profits.  In the chart below, the red line is US Debt/GDP, while the black line is the share of GDP that is going to bankers.

Perhaps the equation is just that simple: more debt = more banker profit = more banker control over society.  While we can blame the bankers (and at the very least, we should limit their size and scope of activity via bringing back Glass-Stegall) we also contributed to the problem.  The good news is, individually we can contribute to the solution - by getting out of debt.  Each dollar you repay (or default on) takes away power from banking.  We can do something.

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…The finger should always be pointed at the source of the problem. When the truth hits home then the solution to the problem can be resolved. What was the saying? "if you seen someone jump off a bridge would you jump too?". Perhaps a better Granny tale is out there but this came to mind first. The second was, "sleep on it, things will look better in the morning". It doesn't really apply but Man does it ever settle me down sometimes when things are so out of control. Dave, what a nice addition to this community you are.

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This is why compound money systems have been tried and tried again, yet have never proved sustainable. Even ancient religious texts described them as requiring a Jubilee every 7 periods of 7, or 49 years.
So should we expect the Great Reset to occur in 2020 then?
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[quote=joegalt]


This is why compound money systems have been tried and tried again, yet have never proved sustainable. Even ancient religious texts described them as requiring a Jubilee every 7 periods of 7, or 49 years.

So should we expect the Great Reset to occur in 2020 then? [/quote] That's not a bad guess...as good as any. The point being that exponential things tend to speed up towards the end and it is really, really hard to get things past a certain number of doublings. For example, if you take a sheet of paper and fold it over so that it doubles in thickness, and do this 75 times, it would reach the sun.  One more doubling and it reaches to the sun and back. Exponential systems just get crazy towards the end, and the only people unaware of this seem to be the Fed, other central bankers, and politicians. So, yes, 2020 is a pretty good guess because 1971 + 49 = 2020. 
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All of these are public companies.  I wonder what even smaller set of private investment houses own substantial fractions of these comanies.  There are interesting conspiarcy theories about the Rothschilds, which unfortuantely usually devolve into anti-semtic rants.  But the architecture of a small group owning dominate positions of the entire financial world behind a nearly invisible web of private shell corps and investment companies is probably correct.  This is only one many layers.
Identifying the Rothschilds as invovled at that level makes sense just because they have managed to keep it going for so many generations, which is essential to accumulating so much wealth and influence.  But there are likely many such familes from all over the world that could such a confluence of power and wealth.  One wonders if they know who eachother are, and if the corrdinate their efforts?

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My questioning mirrors the questions just voiced by KingTut and others.  Behind the super-connected corporations are the human beings who own them.  Actual, regular, people.  Who are these people?  How are they organized?
Who owns the 10 biggest corporations?

Catherine Austin Fitts did a piece several years ago (which I cannot find!) on the top 10 owners of the 10 biggest corporations.  Mostly the companies owned each other in an interlocking network of mutual ownership!  But as you worked your way down the ownership lists, we started to find the names of actual human beings and funds controlled by specific families.  And some of those human beings owned portions of multiple of these superconnected companies and sat on multiple boards of directors.  [I can't verify this, but have heard that David Rockerfeller's family is a principal shareholder in 105 of the largest 125 companies.]  Thus we have a concentration of power in a smaller group of people.

Other Examples from History:  The Japanese Zaibastu

The Japanese have a term, zaibastu, which refers to a consortium of companies and enterprises that work together as a team.  Prior to 1900, each zaibastu was controlled by a single family organized around that family's bank.  After WWII, the zaibastu were broken up, company ownership became public, they became more loosely orgainized as "enterprise groups" (kigyō shūdan).  For example, a single group, such as Mitsubishi, would own a large bank, a shipping company, steel mills, farms, newspapers and textile manufacturing facilities.  Industries within the group would collaborate, refer business to each other, invest in each other and supporting the others expansion.  They functioned like a big extended family.

Owning the Media and Deliberately Shaping Public Thinking

I don't know when or where this happened, but at some point multinational "enterprise groups" seem to have caught on that by owning newspapers and hiring public relations firms, public opinion could be guided consciously to specific goals.  In the same way that a politicians speech is written by a team of strategists for specific goals, media programs move the national debate.  As an example pertinent to pp, I noticed Chris remarking on the simultaneous emergence from multiple media sources of the meme that the USA was "nearly energy independent."  

Getting Your Own People Into Political Control Positions

Even Lord Voldemort from Harry Potter knew that he needed to get one of "his people" appointed to the head of the Ministry of Magic.  Countless examples of this process abound:  the lead council for Monsanto is appointed to head the FDA (which regulates, or does not regulate, Monsanto).  Robert Khuzmani, the head SEC enforcer who is most famous for NOT enforcing anything, leaves government to a 5 million dollar job in private industry.  David Martin has a novel in which a group of 12 "investors" purchase a presidential candidate (they already owning the media) and get him elected.  Their man in the white house then enables their commercial enterprises most effectively.  Having control of the US military proves especially useful.

So How Are "The Controlling Elite" Organized?

I would love more information on this question.  I would also repeat KingTut's caution to not deteriorate into villifying any particular group.  Except for being very wealthy, it is safe to assume that most of these people are much like all the rest of us in the humanness of their needs and fears.

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[quote=sand_puppy]So How Are "The Controlling Elite" Organized?
I would love more information on this question.  I would also repeat KingTut's caution to not deteriorate into villifying any particular group.  Except for being very wealthy, it is safe to assume that most of these people are much like all the rest of us in the humanness of their needs and fears.
[/quote]
Except for the rampant sociopathy.

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The top 50 of the 147 superconnected companies

... 8. Vanguard Group Inc (Investment Management) ... 30. Old Mutual Public Limited Company (Investments & Insurance) ... 40. Massachusetts Mutual Life Insurance  
#s 8 and 40 are mutual companies - effectively owned by the holders of their mutual fund accounts (Vanguard) or policy holders (Mass Mutual).  I don't know about #30, but it has "Mutual" in its name.  There may be other insurance companies on the list that are mutual companies as well.  If I'm not mistaken, at least these 2 (or 3) are not controlled by the elite - unless someone owns a huge percentage of Vanguard's mutual fund assets.  Of course that leaves 48 or 47 more that are.
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…deadly power, power to destroy, power to control, power to stealthily move into and out of our lives. I have no real clue who the decision makers are but in my opinion the President of the United States is just a made Man in that community. Personally, I try and stay way below the radar as I want to remain in my comfort zone, 3 squares and a bunk, a little cash in my pocket and listen to my ball games. Don't get me wrong, I participate against those people who want to bring harm to my home or community but the Elite don't really bother with these sorts of things. They have the police, National Guard and other such toys to scratch those itches. Give me my sunny day, some reading, a little math, a round of golf and everything mentioned above and I am living large. Add the safe arrival of my Lady from work she loves and my day is just hunky dory. In other words I am not looking to get my arrrsss kicked every day. Enough of that already. The Elite are way different than we are IMHO. We bore them. 

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cmartenson wrote:


Exponential systems just get crazy towards the end, and the only people unaware of this seem to be the Fed, other central bankers, and politicians.

Do you honestly think that they are unaware of the unsustainability of the system?  Some say they are fools, others say they know exactly what they are doing and that their plan is nefarious in nature.  I guess the third possibility is that they know it's going to blow up but are already too far in. I suppose there is no way to be certain but I can't help but think that these folks have to realize that it's impossible for this game to continue forever.
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In 1967, I went home from college and told my dad (a NYC raised Jew) that they were printing the money and buying a controlling interest in everything. He slammed his fist onto the table and said: Ve shud own da vold! 

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…I am following Detroit's Bankruptcy. I am by no means an expert but my first impressions, and I know and understand this City very well, it is over.Detroit is the first of a long line of bankruptcies in Mid America and elsewhere.
Bondholders think they are protected! Protected how? Detroit has no tax base, and cannot pay. Period. 
They cannot pay so 100,000 creditors take the hit, employees take the hit, and how many of these bankrupt? Debt get destroyed and multiply this by some measure in many Cities to come.
How will Bonds get rated now?
How will anyone be a credit risk worthy of any cash stored away in the vaults at the Fed?
If I were a Banker I would just bide my time and buy up everything, pennies on the buck.
The Banks get you in good times or bad and they use your cash to do it, bail out cash.
Bankruptcy: personal and business and municipalities will be massive going forward are my gut feelings.
Some here have even expressed that they hope these people get their just due when they due bankrupt! As if bankruptcy is some sort of sin! It's business and personal. These are hard times, hard times.
I say, eat or be eaten. What are you prepared to do? Man, we are talking survival not some moral code. Heck, morality will return but only after the dust settles because the streets will be absent any protection as the police decide, no pay, no work. In Detroit the police get paid but don't work anyways.
We are very near the thimble of water that drowns out the entire system as the stadium is full up.
If we know the system is toast then Bankers know and politicians know the system is toast.

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[quote=yogiismyhero]We are very near the thimble of water that drowns out the entire system as the stadium is full up.
If we know the system is toast then Bankers know and politicians know the system is toast.
[/quote]
That's why there are 10 cameras at every intersection and RF antenna drops (taps) facing down from the telephone poles throughout most neighborhoods.  All of the legislative stuff as well.  All points to the same thing…the politicians/TPTB are very aware that we are closing in on a systemic shock, and are acting (predictably) as sociopaths do.  Sociopaths attack what they fear.  Fear of losing control drives them towards more control. 

20

you cant own anything you gained through subversion lies and fraud. That is the banker economy in a nutshell.
It will all be taken away from them, and they know it and fear it more than anything.

The only problem is that people arent hungry enough for it yet.

It will be the military that first turns on itself and then the elite. Endless wars has the consequence of soldier citizens. The elite will try to start a big war, that no one will be interested in, and it will be their undoing.