The Finance Industry
   The finance industry serves an important function but the key word for many is the word serves. It has been estimated that the ideal size of this industry should be around 2.5% in relation to other industries that make up a country's GDP. In most western countries the financial sectors have grown to almost 10%. This results in a 'brain drain' from other sectors meaning that the best and brightest university students graduate to become money speculators rather than engineers and doctors. Of course, the finance industry provides essential services for the other sectors of the real economy, for example, lending facilities, and accounting services, but the bigger this sector grows the more it tends to feed upon itself with money circulating within the sector and never entering onto the real economy. This is a world where currency is produced rather than real wealth and speculation on manipulated markets replaces real productivity.
   A good example is how corporations use their profits to buy their own shares to give the impression that the business is healthy rather than investing in research or infrastructure to make sure the company is actually healthy.
  

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Credit Crunch and QE 
   Since the global financial crash or 'Credit Crunch' in 2007/2008, Central banks have cut interest rates to almost zero for banks and large corporate institutions and have been engaged in Quantitative Easing (QE). QE is very basically national governments buying bad debts from the biggest banks in order to give them enough money not to go bankrupt. However, it has resulted in huge quantities of money from the real economy being transferred into the financial sector. This has led to record profits and salaries for bankers and record highs being recorded on almost every market including stock exchanges and bond markets. But the downside of this is that the prices of real goods that ordinary people must buy have gone up whilst most people's salaries have gone down. So, within the financial sector there has been an inflationary spiral, whilst in the real economy people are experiencing deflation.