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What this index is telling us, is actually quite frightening. The index indicates a hyperbolic rate of growth. The growth was very slight at first, but soon became more rapid. Now it rises very steeply. This is what has been happening to the stock-value index when seen in the long term perspective. Now one must realize that this steeply rising index represents a destructive process.
The damage that society has inflicted on itself, which is indirectly measured by this index, is, of course, increasing as sharply as the index increases, and this increase follows the nature of a hyperbolic curve. It becomes plain from this that the presently far advanced self-amplifying destructive process cannot be maintained much longer. It is a terminal process nearing its end.
Someone, jokingly, compared the present society to a dog that carries a thousand-pound-flea. The flea is the speculative financial system. In this symbiosis both the flea and the dog are doomed. As the flea is sucking the dog dry it kills the very resource that it is feeding on, and dies also. This type of symbiosis is a terminal process.
The drain on the world-economy, caused by speculation, goes far. It is literally killing people. Some put the death toll resulting from world-wide economic underdevelopment as high as 100 million persons per year, of which 10 million, or 33,000 a day, are the deaths of children below the age of five.
In the beginning, this death toll was mostly concentrated in the poor countries. Now the circle is widening as the economies of the so-called rich nations are collapsing towards the earlier third-world status. Eventually the point will be reached when the constantly increasing demands for gambling funds can no longer be met. Then, the flea (the inflated financial bubble) dies. But the dog dies first.
The Dow Jones should be called an insanity index, because the so-called profits gained from financial trading, though they exact a tall price from society, aren't profits at all. If there were real profits generated in the stock trading market, society would benefit and develop by the process. Instead, it collapses. The collapse proves that there are no profits generated by the con game in which investors steal from each other as they sell their wares to one another at ever higher prices and rob the physical economy in order to be able to so. The inevitable end result will be the disintegration of the entire financial and economic system.
The world-financial system is in trouble over the society's massive financial speculating, especially its financial derivatives gambling. This type of gambling is made up of various types of side-bets placed on the performance of stocks or other elements of the financial markets. A whopping $100 trillion in these side-bets contracts are typically outstanding at any one time, globally. This sum is so huge that a single upset could overwhelm the entire world-financial system several times over, like a financial atom bomb. When it blows, every bank, financial institution, investment house, etc., could be bankrupted over night, especially the banks. The U.S. banks presently carry an "off-balance-sheet" exposure that exceeds $22 trillion. This exposure, which doesn't even appear on the banks' balance sheets, is nearly five times greater than all the bank's assets combined ($4.5 trillion), and is 73 times greater than all the banks' equity. When this happens, one really can't talk about a "banking" system anymore. The traditional banking institution, the monument of stability, no longer exists. The banks have become gambling casinos, and the public's deposits are on the table while the wheel spins. Today's bankers are so deep into the game, they are literally betting the bank and their depositor's money. Will thy be winning the next round?
The upper echelons of the world-financial empire are well aware of the systemic volatility that the global gambling orgy has created throughout the entire world-financial system. This realization was reflected in a strange phenomenon in the financial press, where, in August 1997, one suddenly reads, all over the world, that investors are advised to sell their stock; that a major crash is about to happen. Most writers predict a market melt-down in the order of 20-50%. "Sell your stock now!" they urge their readers. In real terms, this warning in not for their readers' benefit, though the readers would be well advised to heed the warning.
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