Liberia: Nominal World Replaces Real World – Liberian Daily Observer

Written by Amanda

Liberia: Nominal World Replaces Real World  Liberian Daily Observer

On the eve of the Annual World Economic Forum, which starts on May 22, 2022, let it be known that the world as we have known it to be is no longer the same world. 

The nominal world, known as the finance world, has replaced the real world, known as the wage world. Post World War Two evidence indicates that although money supply growth became higher, the widening of the gap between the nominal world and the real world began in 1971. It is useful to note that the Gold Standard ended in 1971. The widening of the gap between the nominal world and the real world is what Nomi Prins, a former Goldman Sachs employee, calls The Great Distortion.

The Great Distortion is seen in many forms, including the following: only 18 percent of the workers in the United States of America (USA) experienced growth in wages on par with the growth of inflation; the growth of the money supply in the USA from US$1.4 trillion in 2008 to US$22 trillion in 2020, and the increase in the value of financial technology (fintech) stocks by 272 percent from 2018 – 2021. 

The evidence on wages has already been presented.  Ms. Prins predicts that there is going to be a wealth transfer from the real world to the nominal world in the amount of US$150 trillion during this decade. Given the fact that the US economy is the largest economy in the world, whatever happens in the US economy has a global impact.  

The year 1971 has become the year that The Great Distortion became known because of the evidence of the widening of the gap between the nominal world and the real world. 

Let us recall that the year 2008 became the year of the Great Recession because of the evidence of the fall of the big investment banks, like Lehman Brothers, during the latter part of 2008. This evidence indicates that the era of sub-prime lending had begun because big investment banks, like Goldman Sachs, Meryl Lynch, J.P. Morgan, Bear Stearns, Lehman Brothers, CitiBank, and the American International Group (AIG), had lowered their standards for lending. 

The lowering of standards for lending, subprime lending, made the financial statements of the big banks look good but the borrowers did not have the money to pay back their loans, especially housing loans when their loans became due. Banks cannot lend money when they do not have the money to lend. The banks did not have money to lend because the borrowers did not have the money to pay back their loans. Basking in the subprime sunshine, the banks lowered the standards for lending.

Then comes the opening of the classic bailout door: the poor bailing out the rich, when the rich are getting richer and the poor are getting poorer. The Bush administration was the first to enter with a bailout of US$800 billion. Then the Obama administration succeeded the Bush administration and pushed in another US$800 billion to bail out the big banks. This, then, was the situation when the big investment banks were considered “Too Big To Fail”. 

No wonder, the CEO of Goldman Sachs went to Washington, D.C. in his private jet plane to attend a Congressional hearing after he had received his 2020 bonus of US$20 million for a “job well done.” The “open secret” is that Goldman Sachs utilized its privileged position with Standards and Poor’s (S&P, the Stocks Rating entity) to get “insider information” to the effect that S&P was going to announce that the prices of certain stocks would be given a lower rating, meaning that their prices would be lower. 

So, with this information, Goldman Sachs hurriedly bought many of these stocks. Given the lead reputation of Goldman Sachs, other investment banks followed Goldman Sachs. Then the prices of these stocks began to rise, given the demand, as Goldman Sachs expected. So, Goldman Sachs hurriedly sold these stocks at high prices and made many profits in a relatively short time. Perhaps, this is why the Goldman Sachs CEO got the US$20 million bonus for a “job well done.” 

Dr. Alan Greenspan, the Chairperson of the USA Federal Reserve at the time, indicated publicly that the subprime situation was good for the USA economy because it was deregulatory. Behind the public space, Dr. Greenspan was receiving consultancy fees from entities, especially the Nordic Countries. 

As the rain on Ukraine has poured complications, Nordic Countries, especially Finland and Sweden, are reconsidering their relationship with NATO. On Wednesday, May 18, 2022, Finland and Sweden applied for membership in NATO. The NATO handling of the Russia-Ukraine Saga is not as strong as expected because of the divisive actions taken by the Trump administration. The Biden administration is working considerably to end the divisive impact of the Trump administration.

In developing countries, like Liberia, the Rain on Ukraine is having a violence-oriented impact, as seen in the effects of the increase in the already high petrol prices. With the increase in petrol prices, transport prices are rising, food prices are increasing, reducing real wages and promoting the prevailing poverty generation. 

How can this poverty generation be ended and prevented from reoccurring to pave the way for the entry of poverty alleviation? Locally and globally. 

This entry is possible when knowledge about the poverty generation impact can be spread in ways to raise awareness to motivate people to work together through the Rule of Law to transform the UNFAIR electoral system into the FAIR electoral system in order for good persons to be elected. When good persons are elected, only then will good actions be taken to install Justice for All, the only ingredient for sustainable Peace and Progress.

Source: liberianobserver.com

About the author


Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai

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