Why the IT Sector is Falling: A Deep Dive into Central Banking, Freebies, and Dollarization

The story begins with the formation of the Central Banking System. The Federal Reserve in the United States was created around 1913 to manage monetary policy, taxation, and credit flow.

Governments use central banks to fund freebies and welfare schemes, especially during elections. These costs are recovered by either raising taxes or printing more money, which reduces the purchasing power of currency. Since high taxes can upset voters, politicians prefer printing money, which indirectly affects people’s wealth.

Corporates support this system too. When central banks print more money and keep interest rates low, companies can offer salary hikes while the real value of money drops, keeping workers unaware of reduced purchasing power. This politician-corporate nexus benefits from central banking and opposes private cryptocurrencies, which could bypass central control.

Now let’s look at the stock market. It was designed to bring people’s savings into the corporate world. This shifted small business owners into jobs, creating a model of extreme capitalism.

The roots of the current crisis go back to 1971, when the US dollar became fiat, ending gold backing. In 1973, the Petrodollar system began with oil traded in USD. These two events helped create a tech boom in the West.

By the late 1990s, IT startups boomed. But their valuations were based on intangibles—like brand value and user data—not real assets. As of today, 90% of S&P 500’s value lies in such intangibles.

The Euro was launched in 1999, marking the first de-dollarization attempt. In response, NATO bombed Yugoslavia (March–June 1999) to weaken the Euro. The US then passed the Gramm-Leach-Bliley Act on 12 November 1999, removing rules that kept commercial and investment banking separate.

This allowed banks to invest customer deposits in high-risk ventures. The result? A tech bubble that peaked in 2000. When Europe refused to buy US Treasuries, the US brought China into WTO (Dec 2001). China promised to invest in US Treasuries, replacing Europe.

Still, the IT sector crashed by October 2002, losing 78% value. Now, a new de-dollarization wave is coming from Asia and the Gulf. As countries trade without USD, the USD cycle is breaking. This is why the IT sector is collapsing again.

The Chinese real estate sector is also falling. Both US IT and Chinese realty had absorbed the reserve currency bubble. Now, both are bursting.

Finally, the 1999 Act made it legal for banks to risk customer money. The 2008 crisis proved that even big failures have no punishments, because it’s all legal now.

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