"More than one derivative can cover the same debt asset, so that a mortgage could be worth more dead than alive to a bank."
This puzzles me. I don't quite understand how derivatives make money for the bank, or what would happen if a particular mortgage were to fail (i.e., not get paid in full).
" By 2013 the Bank of International Settlements put the derivative sum at a literally earth-shattering $700 trillion."
If it were literally earth-shattering, we'd probably have experienced a major extinction event :-) .
"A notional value is the face amount of an asset that isn’t owned."
I have a simple brain, so I need a simple example. Suppose I took out a $200K mortgage on a house that was assessed at $250K when I "bought" it, and after a few years I now owe $180K in principal. What is the notional value of this mortgage now? $250K? $200K? $180K?
"Debt is a transfer of wealth, in housing or knowledge, from one generation to another."
This is very important idea in your book, and it confused me when I first saw it. I am now starting to get it, after my current re-read.
"This was despite Detroit having the fifth-lowest rates for water and sewage[...]"
Lowest in the nation? Lowest in the top 50 cities? Lowest in Michigan?
"The former mayor is serving 15 years but JP Morgan paid a $75 million fine, which neither hurt the perpetrators nor helped the victims."
I'm assuming it didn't hurt the perpetrators (Morgan) because it's a tiny amount compared to their revenue (i.e., just a cost of doing business).
"North Carolina paid $60 million—equal to 1400 full-time employees[...]"
I think this means full-time for a year. That would be about $43K per employee.
"In another parallel to Greece, it was a Moody’s rating downgrade that sunk Detroit."
Sank? (says the Inuit grammar police dog)
"The sudden liability would have led to immediate bankruptcy but Mayor Cockrel pledged the casino revenues as backing for the pension bonds, turning them into secured debt. Because assets could now be seized in a bankruptcy, the banks could insure the bonds using the casino revenues as collateral."
Three surprises here. How did this Cockrel fellow get into the story? What casinos? What assets?
"The FDIC would be required to cover deposits under the limit, in an end-run around the Dodd-Frank bill that prohibited taxpayer bailouts of the banks."
I always thought of FDIC payments as bailing out the depositors, but here you're saying that's effectively a bank bailout -- if understand correctly.
"municipal bonds or General Obligation (GO) bonds: a means for the public to borrow its own labor back from private creditors by pledging future taxes in exchange for loans."
The bit about "pledging future taxes" puzzled me until I saw that later you said that bonds "are repaid through additional assessments to the property tax." So I'm guessing that the "future taxes" are property taxes.
P.S. I've incorporated your changes into my copy of the book.
Mortgages get sold in tranches to speculative investment funds. These are covered by derivative bets. The derivative bets are more than the value of the asset. It might be like betting that a horse will win by a nose and by a head--if it comes in 'a head', you're paying twice on the same asset.
It only hasn't shattered the world because those bets haven't come due. So let's say that variable rates rise and large numbers of those mortgages held by investment funds go into default. The asset they hold isn't the house, it's your promise to pay. To cover that risk, they also have derivatives held by the same bank. The bank now needs to cover their derivative bets for the total value of those defaulted mortgages--which it can't do. So the bank goes into default and the derivatives are given super-priority ahead of your 'deposits', which are a liability to them, not an asset. That would shatter the earth.
The example of 'notional value' doesn't apply to you, as the homeowner. You have the actual value and the paper to show for it. I don't know if there is a simple example for this. From Investopedia: "Notional value is the face or total value of a position in a financial instrument, such as a derivatives trade. It helps distinguish the total value of a trade from the market value or cost of taking the trade. There is a clear distinction between the two: notional value accounts for the total value of the position, while the market value is the price at which that position can be bought or sold in the marketplace.
The notional value of derivative contracts is much higher than the market value due to leverage (using borrowed money). Leverage allows someone to use a small amount of money to theoretically control a much larger amount. The amount of leverage used can be calculated by dividing notional value by market value."
I don't remember on Detroit, but I think it was in the nation.
On JP Morgan, remember that a limited liability corporation is a one-way transfer of assets--the shareholders can receive money in dividends, salaries or payments, but they can never lose more than they've put in. So the fine to JP Morgan doesn't come out of anyone's pocket. The execs keep their bonuses and would have already sold their stock if they thought it would tank ... which it didn't, obvi.
Yes, please add "1400 full-time employees for a year."
Yes, 'sank.' Good Inuit grammar police dog! Have a kipper!
I had to look up the context of the Cockrel casinos: " In 2009 their pension bond credit rating was dropped three levels in one day, triggering a clause that allowed the banks to demand payment of $400 million in full. ...The sudden liability would have led to immediate bankruptcy but Mayor Cockrel pledged the casino revenues as backing for the pension bonds, turning them into secured debt. Because assets could now be seized in a bankruptcy, the banks could insure the bonds using the casino revenues as collateral. This was a last ditch maneuver that might be compared to getting in the car with a gun-wielding rapist in the hopes of being in a better position to escape later."
So Cockrel was mayor of Detroit in 2009. When the pension bond credit rating was dropped 3 levels in a day, the $400M payment would have caused Detroit's bankruptcy in 2009. Instead he pledged the casino revenues so the bonds were secured debt, or an asset rather than a liability, that could be seized in bankruptcy. That delayed the bankruptcy but made the casino revenues seizable.
Again, in context, "Pension plans, states, and local governments certainly have accounts over the $250,000 maximum of FDIC insurance. Using their super-priority status, the derivative counter-parties would be first in line to attach the assets, leaving government accounts emptied out. The FDIC would be required to cover deposits under the limit, in an end-run around the Dodd-Frank bill that prohibited taxpayer bailouts of the banks."
The bank would still go bankrupt but the speculators with derivatives would first take all the deposits, including pension plans, state funds and local gov't. Would Congress bail them out with taxpayer money rather than have that happen? Maybe. It was an end-run around the intent of Dodd-Frank to keep banks from mixing their speculative accounts with deposits.
Yes, if you look at your property tax statement, it's full of bond assessments. That's why a bond needs voter approval, because it adds the repayment to the property tax.
Weirder than lotteries to support the schools? First we outlaw gambling because it's an addiction that ruins families and lives. Then, it gets put back in as a monopoly in order to 'raise money for kids, teachers, firefighters, police ...' etc.
So yes, gambling is illegal in Detroit except for the casinos owned by the city. I think that's how it worked.
I looked up the lottery here in Crazyfornia. <sarcasm>The money goes to schools, and the schools are doing such great job, so I guess it's all good.</sarcasm>
Yes, and there are some terrible stories about what gambling addiction has done to families, one of which I know personally. If gambling is so immoral that we make it illegal, it doesn't suddenly turn wholesome for a 'good' purpose. The lottery also gives very little to the cause and is a scam. But on the other hand, if schools are something our society supports, we should be doing that--not making them reliant on fundraisers.
I was wondering about how much money actually gets to schools. The California Lottery site has some heart-warming videos and stats about how much money the schools are getting. But I am skeptical.
I have mixed feelings about schools. But my thoughts on this are too lengthy to write down here.
Thank you for reading all this, sue. It's a long chapter! I recorded it in three sessions, in between my daughter's business calls, and I kept thinking, 'Is this the last section?' It's not an easy thing to wrap your brain around. Especially when concerned with life!
I was explaining credit creation to my daughter's boyfriend (who I was just meeting!) last night. His dream is to open a restaurant but the economics are daunting. I told him how my caret system would allow them to lease or even buy the property for it at half the price of outsiders. And all the people in the community would be able to use their locally produced food dividends at the restaurant. He could pay all the workers in carets, so there's no income taxes, only soc sec. He can be connected to all the farms and ranchers in the area, and be a part of the animal husbandry process.
At the same time as understanding what they're doing to us, and how they're controlling and constraining us, we need to see how much we could do if not constrained. It's the attraction of what's possible that will pull us into this change.
It's my pleasure to read you work, Tereza. And I do my best to grasp the depths of their machinations, which you explain so well. There are few who have the searing intelligence and pen(wo)manship (let alone integrity) to tackle sifting the dark arts of pillage, and the solution.
I very much hope that your daughter's boyfriend has the qualities to hear and put into practice your caret system. If so I can see his restaurant vision materializing, becoming hugely successful, and emerging as a blue-print for a community renaissance.
I appreciate that, Don. Yes, this is a deep chapter. For those who think we can simply reform, tax the rich, tweak some banking laws, this should make them reconsider. We need an alternative to the dollar that we control, so it doesn't matter how many they amass. As I say in a later chapter, "Leave the money, take the assets." Like the Godfather scene, "Leave the gun, take the cannoli." The money will only shoot you in the foot.
While I have only a rudimentary understanding of the specifics you present, the big picture fits in with my understanding of the trajectory of our society, and the general fleecing of our money and resources.
I was born in Detroit, and grew up in the suburbs. My career was based in the former richest county in the U.S., Oakland County. After I retired, I sensed that the writing was on the wall and that it was time to find another home state.
Money, land and resources in Michigan have long been leveraged.
By the way, Kwame Kilpatrick was just pardoned by Trump. Funny, if he hadn't been black, he would never have been convicted in the first place, like all the other criminals who will never see prosecution.
Austerity is in our immediate future. It's gonna get a lot more ugly.
I have a weird sense that at some point, Washington DC will be relocated to Michigan - surrounded by lakes, and overrun by military.
Maybe it's another life or time, or alternate reality, but the impression is very strong.
Post-industrial Michigan is a very sad place - marked with the remains of proud and hard-working people. But the underlying current is anger, resentment and entitlement. Especially among the Boomers and GenX.
The business climate when I had my business was brutal and exclusive. While I was moderately successful, I never fit in.
Fascinating thoroughly researched work and excellent presentation!
In socioeconomics two axioms prevail, both were made clear in the study:
Axiom 1: Socioeconomic development is impossible with a privately-owned banking sector
Quote: “The eleven million people of Greece were able to channel their outrage, albeit momentarily, into the election of a new president and an economic minister who had an agenda to renegotiate everything from their debt, their relationships with the banks, and even their departure from the eurozone if need be. They had the leverage of government autonomy.”
>> What good did the election do them? Zilch. Only difference was that a young Alexis Tsipras joined the ranks of Money Power puppets.
Axiom 2: It is impossible to affect change in democracies, only a rotation of puppets.
extraordinary take. You are a very talented writer. The thing is that capitalism is a very performative system of creation-destruction. It never gets to a saturation point. Take Japan or South Korea for example. Both are reaching almost a zero birth rate with a maximum fixed capital consolidation with a total social control. This kind of countries where the creation-destruction cycle is paralyzed are poised to catastrophic consequences.
Although I used the term 'capitalism' without defining it in this chapter, in the lexicon of the first chapter I wrote: "capitalism: an economic and political system that concentrates ownership of land and labor (symbolized by money) in the hands of fewer and fewer people through the rules written by those who already had usurped the most wealth from the people—the capitocracy."
In Ch. 13's lexicon I write: "capitalism: an economic system a system for extracting labor by assuming bank ownership of the wealth." The stolen wealth doesn't actually create anything. It organizes labor in order to own more labor, under its own delusional paradigm.
Japan and South Korea are both under the BIS global banking cartel. So capital--the assets that back the money--are already fully consolidated under the bankers. They're living on borrowed time, as are we. Our labor is owed to the bankers in return for our right to live. We have to 'make a living,' living isn't something we get by being born, at least not with a roof over our heads.
I differ here about capitalism not creating anything. All the elegant European capitals are the product of labor extraction. The American skyscraper Skylines are the vertical product of capitalism. Hollywood is when capital mutates into images (Guy Debord). On the contrary, Marx acknowledged the unreal capacity of capital to transform both the matter and the human being itself until it reaches a point where everything has been transformed into lifeless robotic fixed capital with no extra variable capital to extract, when everything is so dead that even death is dead. Thats why I used the Japan analogy to bring your attention to almost totally done capitalist examples. However, if capitalism has the ability to rebirth from its ashes (the infamous bring back better) the process of self destruction becomes much much longer, until the ability for reconstruction is also lost. Thats the way I see it. This is not to counter your point, which I find very accurate.
"More than one derivative can cover the same debt asset, so that a mortgage could be worth more dead than alive to a bank."
This puzzles me. I don't quite understand how derivatives make money for the bank, or what would happen if a particular mortgage were to fail (i.e., not get paid in full).
" By 2013 the Bank of International Settlements put the derivative sum at a literally earth-shattering $700 trillion."
If it were literally earth-shattering, we'd probably have experienced a major extinction event :-) .
"A notional value is the face amount of an asset that isn’t owned."
I have a simple brain, so I need a simple example. Suppose I took out a $200K mortgage on a house that was assessed at $250K when I "bought" it, and after a few years I now owe $180K in principal. What is the notional value of this mortgage now? $250K? $200K? $180K?
"Debt is a transfer of wealth, in housing or knowledge, from one generation to another."
This is very important idea in your book, and it confused me when I first saw it. I am now starting to get it, after my current re-read.
"This was despite Detroit having the fifth-lowest rates for water and sewage[...]"
Lowest in the nation? Lowest in the top 50 cities? Lowest in Michigan?
"The former mayor is serving 15 years but JP Morgan paid a $75 million fine, which neither hurt the perpetrators nor helped the victims."
I'm assuming it didn't hurt the perpetrators (Morgan) because it's a tiny amount compared to their revenue (i.e., just a cost of doing business).
"North Carolina paid $60 million—equal to 1400 full-time employees[...]"
I think this means full-time for a year. That would be about $43K per employee.
"In another parallel to Greece, it was a Moody’s rating downgrade that sunk Detroit."
Sank? (says the Inuit grammar police dog)
"The sudden liability would have led to immediate bankruptcy but Mayor Cockrel pledged the casino revenues as backing for the pension bonds, turning them into secured debt. Because assets could now be seized in a bankruptcy, the banks could insure the bonds using the casino revenues as collateral."
Three surprises here. How did this Cockrel fellow get into the story? What casinos? What assets?
"The FDIC would be required to cover deposits under the limit, in an end-run around the Dodd-Frank bill that prohibited taxpayer bailouts of the banks."
I always thought of FDIC payments as bailing out the depositors, but here you're saying that's effectively a bank bailout -- if understand correctly.
"municipal bonds or General Obligation (GO) bonds: a means for the public to borrow its own labor back from private creditors by pledging future taxes in exchange for loans."
The bit about "pledging future taxes" puzzled me until I saw that later you said that bonds "are repaid through additional assessments to the property tax." So I'm guessing that the "future taxes" are property taxes.
P.S. I've incorporated your changes into my copy of the book.
Sorry I missed this comment earlier, Mark!
Mortgages get sold in tranches to speculative investment funds. These are covered by derivative bets. The derivative bets are more than the value of the asset. It might be like betting that a horse will win by a nose and by a head--if it comes in 'a head', you're paying twice on the same asset.
It only hasn't shattered the world because those bets haven't come due. So let's say that variable rates rise and large numbers of those mortgages held by investment funds go into default. The asset they hold isn't the house, it's your promise to pay. To cover that risk, they also have derivatives held by the same bank. The bank now needs to cover their derivative bets for the total value of those defaulted mortgages--which it can't do. So the bank goes into default and the derivatives are given super-priority ahead of your 'deposits', which are a liability to them, not an asset. That would shatter the earth.
The example of 'notional value' doesn't apply to you, as the homeowner. You have the actual value and the paper to show for it. I don't know if there is a simple example for this. From Investopedia: "Notional value is the face or total value of a position in a financial instrument, such as a derivatives trade. It helps distinguish the total value of a trade from the market value or cost of taking the trade. There is a clear distinction between the two: notional value accounts for the total value of the position, while the market value is the price at which that position can be bought or sold in the marketplace.
Notional value can be calculated as follows:
NV=CS×UP where: NV=Notional Value, CS=Contract Size, UP=Underlying Price
The notional value of derivative contracts is much higher than the market value due to leverage (using borrowed money). Leverage allows someone to use a small amount of money to theoretically control a much larger amount. The amount of leverage used can be calculated by dividing notional value by market value."
I don't remember on Detroit, but I think it was in the nation.
On JP Morgan, remember that a limited liability corporation is a one-way transfer of assets--the shareholders can receive money in dividends, salaries or payments, but they can never lose more than they've put in. So the fine to JP Morgan doesn't come out of anyone's pocket. The execs keep their bonuses and would have already sold their stock if they thought it would tank ... which it didn't, obvi.
Yes, please add "1400 full-time employees for a year."
Yes, 'sank.' Good Inuit grammar police dog! Have a kipper!
I had to look up the context of the Cockrel casinos: " In 2009 their pension bond credit rating was dropped three levels in one day, triggering a clause that allowed the banks to demand payment of $400 million in full. ...The sudden liability would have led to immediate bankruptcy but Mayor Cockrel pledged the casino revenues as backing for the pension bonds, turning them into secured debt. Because assets could now be seized in a bankruptcy, the banks could insure the bonds using the casino revenues as collateral. This was a last ditch maneuver that might be compared to getting in the car with a gun-wielding rapist in the hopes of being in a better position to escape later."
So Cockrel was mayor of Detroit in 2009. When the pension bond credit rating was dropped 3 levels in a day, the $400M payment would have caused Detroit's bankruptcy in 2009. Instead he pledged the casino revenues so the bonds were secured debt, or an asset rather than a liability, that could be seized in bankruptcy. That delayed the bankruptcy but made the casino revenues seizable.
Again, in context, "Pension plans, states, and local governments certainly have accounts over the $250,000 maximum of FDIC insurance. Using their super-priority status, the derivative counter-parties would be first in line to attach the assets, leaving government accounts emptied out. The FDIC would be required to cover deposits under the limit, in an end-run around the Dodd-Frank bill that prohibited taxpayer bailouts of the banks."
The bank would still go bankrupt but the speculators with derivatives would first take all the deposits, including pension plans, state funds and local gov't. Would Congress bail them out with taxpayer money rather than have that happen? Maybe. It was an end-run around the intent of Dodd-Frank to keep banks from mixing their speculative accounts with deposits.
Yes, if you look at your property tax statement, it's full of bond assessments. That's why a bond needs voter approval, because it adds the repayment to the property tax.
Hope that helps!
Thanks for answering my questions. The whole concept of leveraging and derivatives makes my brain hurt a little.
But I'm still puzzled by the casinos, because I don't understand who owns them -- apparently it's the city of Detroit? That just seems weird.
Weirder than lotteries to support the schools? First we outlaw gambling because it's an addiction that ruins families and lives. Then, it gets put back in as a monopoly in order to 'raise money for kids, teachers, firefighters, police ...' etc.
So yes, gambling is illegal in Detroit except for the casinos owned by the city. I think that's how it worked.
Oh, I know -- lotteries seem weird to me, too.
I looked up the lottery here in Crazyfornia. <sarcasm>The money goes to schools, and the schools are doing such great job, so I guess it's all good.</sarcasm>
Yes, and there are some terrible stories about what gambling addiction has done to families, one of which I know personally. If gambling is so immoral that we make it illegal, it doesn't suddenly turn wholesome for a 'good' purpose. The lottery also gives very little to the cause and is a scam. But on the other hand, if schools are something our society supports, we should be doing that--not making them reliant on fundraisers.
I was wondering about how much money actually gets to schools. The California Lottery site has some heart-warming videos and stats about how much money the schools are getting. But I am skeptical.
I have mixed feelings about schools. But my thoughts on this are too lengthy to write down here.
Excellent, horrific, chapter on the pillaging of Detroit. And all this has been/is going on while the likes of us are concerned with life!
I look forward to our communities issuing credit... Meantime I am watching the masses, gently trying to inform them.
Thank you, Tereza
Thank you for reading all this, sue. It's a long chapter! I recorded it in three sessions, in between my daughter's business calls, and I kept thinking, 'Is this the last section?' It's not an easy thing to wrap your brain around. Especially when concerned with life!
I was explaining credit creation to my daughter's boyfriend (who I was just meeting!) last night. His dream is to open a restaurant but the economics are daunting. I told him how my caret system would allow them to lease or even buy the property for it at half the price of outsiders. And all the people in the community would be able to use their locally produced food dividends at the restaurant. He could pay all the workers in carets, so there's no income taxes, only soc sec. He can be connected to all the farms and ranchers in the area, and be a part of the animal husbandry process.
At the same time as understanding what they're doing to us, and how they're controlling and constraining us, we need to see how much we could do if not constrained. It's the attraction of what's possible that will pull us into this change.
It's my pleasure to read you work, Tereza. And I do my best to grasp the depths of their machinations, which you explain so well. There are few who have the searing intelligence and pen(wo)manship (let alone integrity) to tackle sifting the dark arts of pillage, and the solution.
I very much hope that your daughter's boyfriend has the qualities to hear and put into practice your caret system. If so I can see his restaurant vision materializing, becoming hugely successful, and emerging as a blue-print for a community renaissance.
Brilliant!!
Thank YOU! A lot here!
I appreciate that, Don. Yes, this is a deep chapter. For those who think we can simply reform, tax the rich, tweak some banking laws, this should make them reconsider. We need an alternative to the dollar that we control, so it doesn't matter how many they amass. As I say in a later chapter, "Leave the money, take the assets." Like the Godfather scene, "Leave the gun, take the cannoli." The money will only shoot you in the foot.
While I have only a rudimentary understanding of the specifics you present, the big picture fits in with my understanding of the trajectory of our society, and the general fleecing of our money and resources.
I was born in Detroit, and grew up in the suburbs. My career was based in the former richest county in the U.S., Oakland County. After I retired, I sensed that the writing was on the wall and that it was time to find another home state.
Money, land and resources in Michigan have long been leveraged.
By the way, Kwame Kilpatrick was just pardoned by Trump. Funny, if he hadn't been black, he would never have been convicted in the first place, like all the other criminals who will never see prosecution.
Austerity is in our immediate future. It's gonna get a lot more ugly.
Very interesting about the Trump pardon. Thanks for all those extra details, Philip!
I have a weird sense that at some point, Washington DC will be relocated to Michigan - surrounded by lakes, and overrun by military.
Maybe it's another life or time, or alternate reality, but the impression is very strong.
Post-industrial Michigan is a very sad place - marked with the remains of proud and hard-working people. But the underlying current is anger, resentment and entitlement. Especially among the Boomers and GenX.
The business climate when I had my business was brutal and exclusive. While I was moderately successful, I never fit in.
I don't know if you follow Rat, but he agrees with you in principle. He just takes it to a universal conclusion: https://ratsays.substack.com/p/universe.
Fascinating thoroughly researched work and excellent presentation!
In socioeconomics two axioms prevail, both were made clear in the study:
Axiom 1: Socioeconomic development is impossible with a privately-owned banking sector
Quote: “The eleven million people of Greece were able to channel their outrage, albeit momentarily, into the election of a new president and an economic minister who had an agenda to renegotiate everything from their debt, their relationships with the banks, and even their departure from the eurozone if need be. They had the leverage of government autonomy.”
>> What good did the election do them? Zilch. Only difference was that a young Alexis Tsipras joined the ranks of Money Power puppets.
Axiom 2: It is impossible to affect change in democracies, only a rotation of puppets.
https://www.activistpost.com/node-without-consent/
How does this relate to my post, Angie?
DISASTER CAPITALISM.... the real reason for the Covid-19 military operation FAKE PANDEMIC.
Do you think Trump will do anything about it?
Egon Von Dreyer claims that the total derivative amount out there is 2,4 QUADRILLION dollars !!!
extraordinary take. You are a very talented writer. The thing is that capitalism is a very performative system of creation-destruction. It never gets to a saturation point. Take Japan or South Korea for example. Both are reaching almost a zero birth rate with a maximum fixed capital consolidation with a total social control. This kind of countries where the creation-destruction cycle is paralyzed are poised to catastrophic consequences.
Although I used the term 'capitalism' without defining it in this chapter, in the lexicon of the first chapter I wrote: "capitalism: an economic and political system that concentrates ownership of land and labor (symbolized by money) in the hands of fewer and fewer people through the rules written by those who already had usurped the most wealth from the people—the capitocracy."
In Ch. 13's lexicon I write: "capitalism: an economic system a system for extracting labor by assuming bank ownership of the wealth." The stolen wealth doesn't actually create anything. It organizes labor in order to own more labor, under its own delusional paradigm.
Japan and South Korea are both under the BIS global banking cartel. So capital--the assets that back the money--are already fully consolidated under the bankers. They're living on borrowed time, as are we. Our labor is owed to the bankers in return for our right to live. We have to 'make a living,' living isn't something we get by being born, at least not with a roof over our heads.
I differ here about capitalism not creating anything. All the elegant European capitals are the product of labor extraction. The American skyscraper Skylines are the vertical product of capitalism. Hollywood is when capital mutates into images (Guy Debord). On the contrary, Marx acknowledged the unreal capacity of capital to transform both the matter and the human being itself until it reaches a point where everything has been transformed into lifeless robotic fixed capital with no extra variable capital to extract, when everything is so dead that even death is dead. Thats why I used the Japan analogy to bring your attention to almost totally done capitalist examples. However, if capitalism has the ability to rebirth from its ashes (the infamous bring back better) the process of self destruction becomes much much longer, until the ability for reconstruction is also lost. Thats the way I see it. This is not to counter your point, which I find very accurate.