Financialization Takes The Ponzi Economy To Unlimited Digital Extremes

Financialization can be thought of as the virtualization of real economies

Financialization is an economic paradigm where the conversion of real economic value into financial instruments and their exchange within the financial system comes to dominate economic institutions, activity and value creation.
Through financialization, the financial industry converts any work product, physical asset or service to an exchangeable financial instrument, that can be traded, speculated upon and ultimately managed through the financial system. –Complexity Labs

Poverty & Debt are rising, this is Globalisation.

As the Ponzi-economy, see the markets’ narrative fails another scheme is set to replace it.
For years we have been discussing the threat from institutional governance, the new financial standard and engineering a digital economy alongside securitization with the magic of credit creation.
This is effectively the devious implementation of feudalism, I refer to a form of global property holding where the serfs that must work and pay taxes to live there.

Bluntly stated, its all about debt (as money) and property.
This 21st century modern (Neo-Feudalism) version is made possible by financial engineers and digital technology.

I see an effort to force nations (kingdoms) to merge into centralized units of government (look at the Eurozone, and what the UNITED NATIONS call the ten regions…) – it pains me to contemplate the digital property holdings the “money masters” will claim on their financial ledgers (aka blockchain/fintech).

Rampant greed and tyrannical institutions is on the rise, synchronized with the rise of debt.
The consolidation of power is on the agenda and they seek to control capital flows.
Note the rise of algorithms in super computers to control the markets.

Hegemony: 10 Toes or Ten Kingdoms or 10 Empires

the ten UN development regions…


There is a massive wealth transfer occurring.
When the pension funds admit insolvency, the middle-class will be in the same predicament as the poor with anti-austerity and anti-globalisation slogans.

– Disruptions Are Coming –
The hidden agenda requires emergencies to justify more bad policies to be enforced.
Remember the rulers use crises to change the rules.
Fear Not.
It is all fraud and deception, realize that, then say NO. ~Ron

Title: Financialization Explained
Video posted 29 May 2017 by Complexity Labs


Over the last 10 years, S&P 500 corporations have returned more money to shareholders via share buybacks and dividends than they have earned.


Why Do Corporations Buyback their Shares?

Since the advent of Quantitative Easing we have witnessed unprecedented levels of stock buybacks by US Corporations. Buyback  volumes have surpassed $1 Trillion in five short years as corporate executives have been forced by financialization of the economy to flock to a buyback strategy.

Why the dramatic shift?

  • Corporations have been experiencing Top-Line global revenue pressures & constraints for existing products since the Financial Crisis,
  • They face excess corporate capacity and under-utilization while confronting a mounting global supply glut due to cheap global money and ready credit for all competitors,
  • They see preferential tax treatment for increasing debt and leverage.

During times of low interest rates it is sound strategy to increase corporate leverage, as long as the debt is employed judiciously so that the incurred debt can be safely handled when rates eventually and often unexpectedly go up. Unfortunately, what is occurring is that debt is not being invested into productive wealth generating assets but rather into reducing the equity capitalization of the corporation. There are potentially major longer term economic, political and financial ramifications from this occurring.

By buying back shares corporations blatantly promote better EPS (Earning per Share) for the same or falling earnings. This Wall Street welcomed,  superficial ‘slight of hand’, often has the effect of driving up share prices, which is the critical “currency” of the modern corporation which they employ for both acquisition and maybe more importantly for protection from takeover raiders.

Its About Dividend Payout versus Dividend Growth

A critical element of corporate rationalization for the strategy adoption few investors appreciate is actually about the reduction of the cumulative amount of Dividend payout while showing the dividend payout percent to be increasing on a per share basis. In a world starved for yield with over 70% of global bonds with negative yields, and almost all global bonds paying negative real bond yields, this can make US equities very attractive to yield global investors. The best performing DOW Industrial stocks have consistently been those with attractive dividend payouts. Through the use of complex derivative strategies, dividends are often economically stripped out by clever financial institutions so they have no exposure to the underlying equity price.

Today corporations have become so addicted to this strategy, as their free cashflows & EBITDA continues to fall that more and more corporations are issuing bonds solely to buyback shares and pay the shareholder dividend.

Over the last 10 years, S&P 500 corporations have returned more money to shareholders via share buybacks and dividends than they have earned.

Who Makes the Risk Free Money?

Some new investors may need to be reminded that all debt interest owed is paid before one cent of profit is ever earned. Interest is paid based on the corporate capital structure with Senior Secured Debt holders paid first down the ladder to the Preferred shareholders. Debt holders are always paid unless bankruptcy protection occurs. They effectively “milk” debt burdened corporations while equity investors “hope” for a rising stock price based solely on a perceived winning corporate strategy pumped out by the Wall Street marketing apparatus.

Who Really ‘Owns’ the Corporation in an “Era of Financialization”?


View more details into the emerging global financialization

See the financialization report series by Gordon T. Long and Charles Hugh Smith:

Title: MACRO ANALYTICS – 09 14 17 – The Results of Financialization – Part I – Debt-for-Equity Swaps
Video posted 15 Sep 2017 by GordonTLong


Title: MACRO ANALYTICS – 10 05-17 – The Results of Financialization – Part II – “Nationalization”
Video posted 07 Oct 2017 by GordonTLong



Want Worldwide PEACE and Prosperity. We are the solution we have been searching for... Free People on Earth will solve our crisis and create an era of Creativity. Be Aware; Be Creative; Be Active; Be Free; and then Share it. LOVE & Wholeness AMOR y Paz

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Posted in Freedom-Expressed
3 comments on “Financialization Takes The Ponzi Economy To Unlimited Digital Extremes
  1. RonMamita says:

    Look At Global Urbanization Plans:

    Remember We Discussed Engineering Civilization:

    “Law abiding citizens” and “patriotic duty” are some popular slogans that may have been thought up by social engineers.
    Please, re-read Edward Bernays (aka the father of propaganda) book:

    The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society.
    Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.
    We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized.
    […] Our invisible governors are, in many cases, unaware of the identity of their fellow members in the inner cabinet.
    They govern us by their qualities of natural leadership, their ability to supply needed ideas and by their key position in the social structure.
    Whatever attitude one chooses to take toward this condition, it remains a fact that in almost every act of our daily lives,whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons […] who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind, who harness old social forces and contrive new ways to bind and guide the world.” -Propaganda, Edward Bernays

    Title: Global Cities: Full Documentary
    Video posted 05 Oct 2017 by Complexity Labs


  2. Hey Ron, its been a while; life is taking us to the trenches and away from worshiping the image of the beast; been wundering why your posts are not appearing on my reader; could not even access my site; strange glitches in AI dom;

    Really enjoy Gordon T. Long’s humour; be blessed


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