For us mere mortals the idea of handling thousands of millions of pounds – or any other currency – is close to fantasy. And there are plenty of stories of how suddenly becoming rich has just been too much for the lucky recipient to handle.
So it is no surprise that those who do handle money on such a grand scale tend to be regarded as people empowered with superior – almost supernatural – powers. But in reality this is never the case. They are just humans who through birth, skill, hard work or sheer luck have got their hands on wealth. And the successful ones have used that wealth to make even more – often through avoiding unnecessary expenses like taxation.
Take Christine Lagarde; currently in her second five year term as managing director of the International Monetary Fund (IMF). A role that seems to operate outside the constraints placed upon the rest of us. For example Lagarde’s summary of the Greek financial crisis in 2012 was that not enough Greeks had paid their taxes. Now this may be true but coming from someone not paying any taxes on an annual salary of $468,000, plus serious expenses, strikes a sour note. A situation that supports the charge that the elite are granting themselves exemptions from taxation.
But personal gain is not the biggest issue involving the big money players. Rather it is how they are managing the millions, billions and trillions of dollars. euros, et al that flow through governments and central banks. And the biggest potential source of problems here is the European Central Bank (ECB); mainly because it directs the EU’s national banks but also because of the huge amounts involved.
The president of the ECB, Mario Draghi, controls and sets policies involving vast amounts of euros; either directly or via the EU’s interest rates. And for many months the ECB has been buying bonds to the tune of 80,000 million euro per month. But buying them by simply creating more euros – a process that used to involve printing bank notes but is now just updating a number in a computer record.
Obviously for anyone other than a central bank this would be fraud on a grand scale. And for anyone to suggest that this is a policy that is bound to fail eventually would mean that they are dismissed as too dumb to understand such high finance.
But simply this monopoly money is being swapped for bonds (more pretend money) issued mainly by big business or national debts. Finding out how much goes to who is not straight forward. However the Corporate Europe Observatory has worked out that some big beneficiaries are corporations like Daimler, BMW, Volkswagen, Shell, Total, Eni (Italian Oil), Repsol, Siemens, Thales and even Ryanair.
Now even if everything in this quantitative easing programme is legal and transparent its only function is to shore-up struggling Eurozone economies with cheap money. And the scale of the money printing is frightening. If we bring the amounts back to human scale you can see the problem. With roughly 500 million people in Europe the ECB are creating some 160 euro per person per month. Not a lot it seems – but the total is mounting steadily and that is on top of the vast amounts of debt that the EU already has.
But with such vast sums being produced out of thin air and moved across multiple jurisdictions the opportunities for the odd million or two to vanish are all too real ..