An analogy of the Financial Markets as a tool for wealth transfer

Like a coin, the financial markets can be examined from two distinct viewpoints. Wealth gets transferred from the poor to the rich while the average person sees just one side of the story.

     The first side shows financial markets as a way to get rich and secure a bright future for everyone. It implies that there will be no financial loss if there are an equal number of buyers and sellers. However, we must understand that whenever one person prospers, another has to endure a loss of equal size. Thus, the utopia of worldwide prosperity that was promised continues to slip through us.

     The second side of the coin reveals the financial markets' true function, which is to redistribute wealth from the poor to the wealthy. It manipulates the first face by preying on people's natural tendencies and weaknesses.

     To better understand this comparison, let's look at an example. Think about how high-volume securities trading differs from low-volume trading. Buying and selling 100 shares of stock (let's call it ABC) is a breeze, but buying and selling 1,000,000 shares of ABC is extremely difficult. Buying such a large quantity of securities requires convincing an investor or several investors to part with their holdings at an agreed-upon price. Why, then, would current ABC shareholders want to sell their shares if the market is forecasted to rise?

     The buyer should exert all of their power and influence to persuade these stockholders to sell their shares because they are doomed to lose money in the market. As a result of the pressure, many shareholders are selling their holdings, which provides the buyer with the opportunity to acquire the necessary number of units at the desired price. This argument overlooks the possibility that many buyers simply offer a fair price for the shares and convince sellers based on market trends and analysis, rather than resorting to coercion and manipulation.

     Here, the buyer has more than just persuasive financial muscle. They employ their sway over the government, the media, and the regulators to poison the market. They use their influence to disseminate negative information, push for competing policies, and encourage authorities to take a tough stance. Public opinion is affected by these external factors because they foster an atmosphere of uncertainty and fear. The buyer uses their extensive resources and extensive network to cultivate an atmosphere that is friendly to their wealth transfer agenda. Using depressing news, incompatible policies, hawkish regulators, and artificial selling pressure, they bring down the morale of the less informed and weaker participants. Through coordinated price manipulation, they can more effectively buy cheap and sell high, stealing money from unsuspecting victims.

     The buyer must now sell 1,000,000 units of ABC to the same group of people but at a higher price. The former buyer is now the seller, and they use their influence to convince their new peers that the market will continue to rise. This complex scheme illustrates the transfer of wealth perfectly. Using their extensive resources and connections, this powerful person creates an external environment that appears to be full of positive news, compatible policies, dovish regulators, and a thriving market. They encourage the general public to invest in the market because they portray it in a positive light, leading more people to mistakenly believe that their money will be well spent if they do so.

     People who have money, connections, and influence take advantage of the feelings and weaknesses of those in the middle and lower classes. They convince those involved to sell their stock at a low price, and then buy it back at a higher one, resulting in a total wealth transfer. This tactic exploits people who are less well-informed and less powerful than you to get at their hard-earned cash.

     Such transfers of wealth have occurred frequently in financial markets over the years. However, it is essential to understand that the analogy does not intend to criticize the financial markets. Instead, it should encourage us to dig deeper, learn more, and approach the murky world of money with more caution and common sense.

     Awareness, seeking knowledge, and proceeding cautiously in financial matters are weapons we can use to fight back against the forces that threaten to exploit our dreams. Let us not sit on the sidelines, but rather take initiative in seeking the truth and paving the way for a more equitable economic system. Although knowledge and caution in the financial markets are essential, it is also important to remember that wealth transfer isn't inherently evil. Making money off of this massive scheme is the only option.

✍ Originally Posted: Publish0x