The greediest and most aggressive creditors invested in private and sovereign debt of countries, which paid them bulky interest rates, in many cases usury interest rates. They knew the risk that it implied and now that risk materializes, they want to keep profiting. When extraordinary profits are obtained from risky debtors, it is because you are gambling on risk not materializing, however, if it happens, you need to assume it. They should consider themselves well served with the huge profit obtained and not abuse exhausted debtors without repayment capacity. They act with the arrogance of their power and impunity of not dealing with the destructive effects they generate.
Greedy creditors acquired high-risk debts imposing interest rates inexistent in their countries of origin; today, they face situations where exhausted debtors cannot keep on paying back such debts. It is worth pointing out that high rates, sometimes usury rates, were paid with the suffering of whole societies. In some cases, these were impoverished societies that to meet the compelling needs of their peoples did not know or could not find other options besides indebtedness. In other cases, they were societies managed by neoliberal governments in complicity with creditors that sponsor indebtedness, which only helped to facilitate capital flights. Now, the sanitary crisis couples with the economic one; the world faces a tremendous contraction. In this dramatic context, impious creditors blackmail countries with unsustainable debts to collect as much as possible. That is a deplorable and unacceptable behavior.
These investors are not naïve, little sophisticated, that do not know the risks of each operation they do. On the contrary, they are highly capitalized groups with capacity to evaluate where, how, and when to invest. They have advisors and vast experience in identifying sources of extraordinary profits usually associated with high risk. Thus, they invested in bonds that offered high interest rates in accordance with the risk inherent to such investments. What they expect now, having obtained extraordinary profits and not assuming the consequences of the risk they knew existed? It is a flagrant abuse of power, they exert with diverse complicities: local politicians that sabotage their countries, likeminded media, legislations imposed by themselves to protect their interests. It is a horrible mixture of institutionalized greediness and arrogance.
Why do they do that? In another text, we shared our perspective. In essence, a powerful minority that controls large financial resources was able to eliminate almost everywhere the restrictions that prevented the speculative allocation of those resources. Thus, free mobility of capitals was transformed into debauchery to obtain extraordinary profits without contributing to any development. Covetousness was installed in financial markets imposing those high interest rates as the “norm” of the time. Shareholders, investment funds, banks and large international corporations appropriated the world. The result is in plain view: fundamental processes that sustain the future of the planet and wellbeing of large majorities have been compromised. These groups with endless greed do not accept responsibility for the damage they produce. What guides and motivates them is maximizing profit. They could care less about the “collateral” effects they produce, allegedly undesirable but foreseeable. They have green light for taking advantage by whatever means of any opportunity to augment their own patrimonies and that of their shareholders. They believe they obtained their fortunes on their own merits, thus society’s effort does not concern them and they demand the State to avoid interference with their eagerness to accumulate, except when a crisis breaks out to “save them” based on public resources.
These concentrated groups, merciless creditors, usually do not have clean trajectories. Many of them blackmail with their loans and evade, or at least elude, full payment of their taxes. They have the necessary advisory services to do so, unlike what happens with the rest that pays their taxes. For that, they use all the loopholes present in current legislation (that they conditioned in their favor); they expand what is “legal” to the illegitimate but also, such is their greed that they frequently cross over the frontiers of the legality they helped to established. The crimes and misleading operations they perpetrated are countless.
Being their actions so destructive, why they are not punished or, at least, prevented from operating? Because the power they have is huge and they act accordingly. For example, suffice to say that the third world’s economy after United States and China is not a country but Blackrock, the largest investment fund with its associates. Certainly, there are other large investment funds such as Prudential Financial, Fidelity, Ashmore, Alliance, among others. It is clear, then, that the prevailing normative order, the (de)regulation of capital flows and even values and common sense imposed by the powerful facilitate that they can blackmail cornered up debtors with complete impunity regarding the consequences of their acts.
We pointed out that greedy creditors act with local complicities, scoundrels that sell their homeland for money and other perks. These defectors evade and flight millions of dollars each year away from their countries creating situations of capital shortage; in these contexts, complacent governments leap on over indebtedness. Instead, if evasion and capital flight were eliminated, countries could have local financing, genuine and sustainable, to finance their own development without resorting to the onerous indebtedness which is the most effective instrument of domination over our countries.
This submission can be cut off as long as we are able to dismantle the engines that reproduce the unbridled concentration of wealth and decisional power, process lead by concentrated groups erected as helmspersons of the course imposed on humanity.
Resistance against this financial ordering faces countless obstacles and a justice system established to make it hold. Most effective answers are about collective action that only politics sustained by firm social coalitions can assure. For that, we would need to overcome the permanent divisionism promoted by dominators that punish efforts at clarifying, taking advantage of pettiness and subordinate interests that exist in the popular field. A harsh challenge we need to address.
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