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Is Economic Collapse Inevitable? — Mike Maloney

from Stefan Molyneux:

Is an economic collapse inevitable? Mike Maloney joins Stefan Molyneux to discuss the precarious state of the modern banking system, what they don’t tell you about the cycle of inflation/deflation, the negative impact of current monetary policies on the poor and much much more! Michael Maloney is the founder and owner of GoldSilver.com, a global leader in gold and silver sales and is also the author of the bestselling precious metals investment book of all time, “Guide To Investing in Gold & Silver: Protect Your Financial Future.”

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2 comments to Is Economic Collapse Inevitable? — Mike Maloney

  • rich

    Investors have placed a one-way bet on Uber

    Uber, which declined to be interviewed for this story, raised an impressive $2.7 billion in its first five years. The financing came from an increasingly feverish crowd of Silicon Valley venture capital firms, as well as individual technologists like Amazon founder Jeff Bezos, and US private equity funds. But that has been nothing compared with the 18 months since. The figures are not definitive because of Uber’s opacity, but, with its latest haul of leveraged debt and equity provided to Didi Chuxing, it has raised approximately $13.5 billion since the end of 2014, which accounts for 83% of the money attracted in its seven-year history, while increasing its valuation by 50%.

    This leap for Uber has been funded by a new kind of investor. Uber had its last orthodox fundraising round—involving mainly VCs and private equity funds—in December 2014. Since then, its cash has come largely from the sale of debt and investments by either the well-heeled clients of investment banks or petro-state sovereign wealth funds. Qatar invested an undisclosed sum. Saudi Arabia put up a whopping $3.5 billion, and Russian oligarch Mikhail Fridman has thrown in $200 million.

    Recently, Uber has been funded by a new kind of investor. But that is not all. More cash has come via Uber’s push into subprime lending. In May, Uber raised $1 billion from Goldman Sachs and five other banks to create a subsidiary called Xchange, a car-leasing firm for drivers otherwise unqualified to receive an auto loan. To obtain a car through Xchange, Uber drivers pay 11.6% interest, almost five times the standard US rate. When drivers do not keep up payments, Xchange hires repo men to collect the cars.

    The creation of Xchange injects a new dimension of financial risk into Uber’s business, one endemic to subprime lending, and a reputational one as well. At once, it is not only the sleek and courteous ride-hailing business of its legendary early years, but now one that repossesses cars from deadbeats.
    In most successful investments, everyone earns a very good return, from the early, visionary risk-takers forward. So it will likely be with Uber, whose early investors seem poised to make a phenomenal profit in an IPO. If you invested $10,000 in the Series A round in February 2011, it would be worth about $10 million if Uber were to go public at today’s valuation.

    http://qz.com/707947/investors-have-placed-a-one-way-bet-on-uber-which-made-us-want-to-figure-out-a-way-to-short-it/?

  • Millicent

    The financial aspect is just one part of it… What is being done is the destruction of the moral base of western civilizations.

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