In a previous article we talked about sweeping things under the table, and I believe the smartest financial reporters have tried to report on this but have been told to ‘let it go.’ As usual, this is about money, so let’s follow that money and discuss why it is the most important thing we can manage in order to pull people out of poverty.
Firstly, I will show you where the money is and who controls it. Then I will discuss why it is so important and how we can change things to get the maximum bang for our buck using techniques that promote transparency and community such as the new blockchain technology; its correct processing power is going to bring a revolution with computational trust.
First, a little about me. I am not too sure why I am championing, ‘the revealing of these facts’ as if, maybe the emperor has no clothes. My career started as a pizza delivery driver.
I stuck that out until I owned the company which included doing my own bookkeeping. I went on to owning many other small companies and continued to do my own bookkeeping. My last 10 year gig was in the Finance & IT department of the world’s biggest company. I mention this because as I was learning bookkeeping and taking bookkeeping courses I got a really good understanding of generally accepted accounting principles. In all of my 35 years of accounting only a few times did I hear something that made me almost fall out of my chair. One in particular was when I heard of these new rules: Short Selling; Mark to Market Accounting and HFT high frequency trading.
The following information is based on an extremely in-depth study done by 3 PhD’s; Dr. Stefania Vitali, Dr. James B. Glattfelder, and Dr. Stefano Battiston all from the Swiss Federal Institute of Technology in Zurich.
This study was barely reported on by mainstream media and has had no follow-up studies. As proof, this is probably the first time you have read about it. Yet, in my opinion, it is the most important thing on the planet for bringing people out of poverty – it’s money! Let’s follow the money and pin point fraud and waste so we can reallocate that huge resource. My guess is there is 5-15% of global Gross Domestic Product (GDP) that is wasted on the wealthy and finance processes.
Mainstream media, rating and regulatory agencies and accounting auditing firms have not dwelled on this because their agencies and shareholders are part of those who benefit. Luckily, thanks to the Internet and new ways of sharing information, this has been discovered. For example, Greg Hunter (USA Watchdog), an independent reporter formally from CNN and ABC has moved to a platform on YouTube and now has more views than most CNN anchors. All this while he does not get paid by shareholders but by reader donations and YouTube advertising streams. We will come back to why this is important, but we will drill down on the study for now:
This 36 page intensely detailed study of the data set shows 147 companies own 40% of the shares of 43,060 transnational companies.
Now why is it so profoundly important that the media or any industry is not owned or controlled by a few? Pretty obvious; they may have a conflict of interest. Don’t get me wrong, we have excellent reporting in the world, the best money can buy; on emergencies, entertainment, weather etc., but just not on this most important item. We have lots of great things going on in this supposed free market. We just need to remove the fraud and waste, and it resides at the very top of the corporation’s control. I know it gets complicated, but please stay with me even as the rabbit hole continues to deepen.
Let’s start with the one mainstream media article I found on this revelation, from New Scientist. Just look at how they named the study; “The Capitalist Network That Runs The World.” Sounds pretty gentle, just how the world should be, capitalism runs the world. Nothing negative is mentioned about the few who really make the decisions, especially via proxies, in the title. Remember 62 people hold more wealth than the bottom 50% of the world. I boil it down to under 100 people making all important big money decisions for the globe.
The study above has real connections of ownership and should be done annually and forced by the public to move in the trend of fairer equity distribution. From the study, I quote:
“relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy”
Make sure to read that twice. This in my opinion is profoundly important to know if we are going to be able to change things. It is to follow the money. Going deeper in this type of analysis would help form better decisions and rules in making global economics more stable and therefore less likely to cause volatile swings. This definitely would go a long way to prevent the connected few front running you in wealth transfer through their investment companies.
This is not to be taken lightly, the 36 page study is the largest most comprehensive study of its kind in history. And it has mostly been ignored by mainstream media.
The results start from a list of the world’s largest companies from a sample of 30 million. Yes huge, 30,000,000 in a data set called Orbis 2007. They zeroed in on a smaller subset group of connectivity as it represented 94.2% of the total Transnational Corporations operating revenue. Make sure that sinks in, 94%! To get to the bottom line, the concentration of control their study pointed to was the top 80% of total control. That means 737 companies or holding companies accumulate that 80%.
This part is crazy: That network of control also shows it is more unequally distributed than wealth. Top ranked companies hold 10 times more control than expected based on wealth. In other words, despite its small size the core holds a large fraction of the total control.
This needs to change. Download a copy of the full study here before the link is taken down should you want to report deeper on it.
I call on the entities like the Brookings Institute, Fraser Institute, Rand Corporation, antitrust agencies and the Federal Deposit Insurance Corporation (FDIC) to get their heads out of the sand. To start building back their credibility and annually fund these studies. Spread the information, demand a direction change for a more decentralized corporate world. With recent record mergers and acquisitions because of near zero interest rates, the control has become more condensed. The public needs to demand change. The FDIC says one of their core missions is “Expanding Economic Inclusion For The Under Served.” The best, quickest and easiest way to do all that is to increase competition and decentralize global corporate control – period.
One radical and sweeping simple change would be to change the ‘corporation act.’ An easy change requiring all publicly traded companies to have a percent of voting shares held by employees and the communities they operate in. This would force the board of directors to listen to what the employees and community are saying very seriously while sharing the profits at large.
The above study concluded that a group of 147 companies has almost full control over itself and they refer to it as an “economic super-entity.” The study also makes note that 75% are financial enterprises.
This has made the world entrenched with too big to fail actors therefore reducing global economic stability. In other words, they are very densely connected and prone to systemic risk. I suggest your money is at risk right now and you should move your investments or pensions to the least risky assets. Please note I am not a financial advisor and suggest you seek one for all your needs, but in my opinion, they are paid for by corporations and live off your fees, and so totally present a conflict of interest. There is power in the individual and the first thing you could do is shop local and or avoid all national companies. Next, you could take your money out of the bank and put it in a lock box or buy physical silver. The banks are stealing your money with fees and fraud. Banks are allowed to leverage your money and put everyone at systemic risk by at least 10x so for every $1,000 dollars you take out you hit that bank by $10,000. Hit ’em hard folks and take these felons down.
Where it really breaks down, is mainstream media does not report nearly enough on bank fraud, military spending and the fact that only a few in the extremely powerful super-entity control the money. The super-entity owns the media. Remember the world is a pretty good place and the system has taken hundreds of millions out of poverty, brought about productivity gains and technology that has been incredible but over time greed has crept in deep and eroded the already shaky rigged system to its core.
I just think it is time to take the conflict of interest away by making things more transparent and exposing the fraud, like the war on drugs, for what they are, a means of controlling the money, people and corporations. As David Stockman, former director of the Office of Management and Budget under President Reagan, says in his new 2016 book called Trumped: “there is a $45 trillion-dollar bubble.”
The existence of an economic super-entity as the study’s authors call it has never been documented before. I would logically assume that control is less today than a hundred years ago, but I don’t know that for sure. The fact that these large data sets have only recently become available has restricted antitrust institution actions and pretty much went unnoticed. I suggest it is time these organizations are forced to act on this information. It has been proven that small cross-shareholding companies can affect market competition. It seems to be common sense as we just look around. We don’t see too many price wars at our local gas stations, utilities, banks, etc. Is it because they have the same shareholders and are either conspiring or simply a wink and nod, or is it the smart way to make more money? Back to following the money and it all makes sense.
The world’s largest 49 holding companies are financial companies and their few leaders control markets. So you may see different logos such like Shell, Esso, BP or Coke verses Pepsi, but really these leaders set the company’s tone and direction. This is a near monopoly with different logos floating around.
To quote from another study done by Oxfam February 2016:
A lack of competition presents opportunities for companies to set prices that enable them to extract returns over and above real value and productivity. Examples include household names such as Google, which has 69 percent of the global Internet search engine market and in 2014 reported profits of $4bn. Google not only defines how the Internet is used but also has a major influence on data protection laws around the world. Other monopoly companies are less in the public eye but nevertheless have a significant impact on people’s lives. Some 80 percent of the corn harvested in the US is genetically engineered by Monsanto, a company that also dominates the global research agenda for genetically modified (GM) crops and their safety standards. These corporate behemoths not only have the power to set prices to maximize their profits, with little threat of competition, but they also influence the politics of these markets, which has a much further- reaching impact on societies. Small retailers also pay a price for corporate dominance. In the US, the Justice Department is currently probing allegations that AB InBev is curbing competition by buying up distributors, making it harder for micro-breweries to get their products on to store shelves.”
Wonder why the Oxfan study did not mention banks (finance) or petroleum companies or the few who really control the big decisions? These 49 chairman of the boards for the largest holding companies set the tone and direction for all the largest institutions on the planet. This is extremely hazardous and they have placed themselves too big to fail systemically to protect their wealth. This knowledge should make you sick to your stomach and furious with outrage.
Awareness is our first defense as you are also a “Powerful Individual;” the same rule-of-law for rich and poor is our second defense. Insisting on the equality gap trending in the right direction is paramount. Solutions are easy, but often seem complicated, but not when you follow the money – just a few simple changes and a much more stable economy would develop.
I believe the next crash is soon, but it could always be delayed by extending what I call fraudulent zero, or implementing negative interest rate policy, or even money printing. This crash will be monumentally detrimental; I expect a 40-70% lost in value on riskier parts of pension holdings. People will finally scream for transparency. Accounting firms, rating agencies, clearing houses and government will be forced by a vacuum into computational trust. All other trust will be subject to suspicion.
Note From The Author What is computational trust? My next article will go into a more detailed explanation and dive deeper into computational trust, transparency, audit trails and technology security.