The Death of Capitalism

Bankers are destroying Capitalism. Unfortunately, most
Westerners won’t realize this until five years from now, when the middle class
has been forcibly relegated to the ranks of the poor. And this isn’t just a
situation that will afflict America but it will likely afflict Japan and many
countries in the EU such as the UK, Spain, and Greece just to name a few.  But for the purposes of this essay,
let’s examine how bankers have destroyed capitalism in the USA.

In 2009, when almost every major US bank manufactured
profits out of thin air and declared themselves financially healthy by (1) changing
their regular reporting periods to exclude months in which huge losses
occurred; (2) changing their definitions of bad debt, and (3) by revaluing
their assets courtesy of FASB, particularly their commercial real estate
portfolios, at fantasy land valuations that they will never receive in the open
market, these events all marked the continuation of the Enronization of America
that is ushering in the death of capitalism. The systemic injection of fraud
and deceit into nearly every aspect of American life, has been unfolding for
decades, even prior to the Enron scandal itself.  In 2009, Bank of America CEO Ken Lewis testified that former
US Treasury Secretary and ex-Goldman Sachs CEO Hank Paulson instructed him to
disobey securities law and conceal material losses in the Merrill Lynch merger
from investors. Lewis additionally testified that Paulson threatened to fire
him and his entire board if he tried to back out of the Merrill deal. These
kinds of activities, devoid of all morals and ethics, have been occurring
regularly within the financial industry for decades. It only seems as if such
transgressions are more numerous today because of the recent attention given
them in the media, but in reality, they have neither proliferated in frequency
nor in expanded in their level of egregiousness.

Anyone that has ever worked for a Wall Street firm is well
aware of the danger an analyst brings upon himself if he refuses to tow the
official corporate party line regarding stock ratings for a company that is
simultaneously closing a financially significant deal with another division of
his firm.  Even though this
atmosphere of “unspoken coercion” of inflated stock ratings existed for
decades, when the bull was strong on Wall Street, very few journalists found
this story newsworthy. Even though regulatory laws were passed many years ago
to separate investment banking interests from securities interests within the
same firm, the percent of US stocks covered by Wall Street firms rated as a
“buy or hold” actually increased from 89% (2003) to 93% (2007) after the
passage of new laws that were supposed to discourage firms from granting
inflated stock ratings. Who in their right mind would ever believe that 93% of
all stocks covered by Wall Street should be rated a “buy or hold” and that only
7% should be rated a “sell”? Of course, in Wall Street parlance, insiders know
that “hold” really means “sell” but still, this is a level of deceit
nonetheless.

When regulations are enforced through self-monitoring and
self-policing as is too often the situation, and when all financial regulatory
agencies are themselves lacking in integrity and transparency, new regulations
can be enacted every day without effect. Self-regulations and regulations
imposed by morally bankrupt people within a broken and corrupt system have
never been effective. That’s why I have zero expectations about the efficacy of
any new regulations being proposed today beyond their efficacy as a highly
efficient smokescreen for politicians to hide behind. How quickly we forget
that in 2002, UBS Paine Webber financial consultant Chang Wu was fired by
branch manager Patrick Mendenhall no more than several hours after Enron
executive Aaron Brown complained to Mr. Mendenhall about an email Mr. Wu had
sent to his clients. In the email that Mr. Brown found “extremely disturbing”, Mr.
Wu had advised all of his clients to sell Enron stock due to massive liquidity
problems he had uncovered, even though UBS Paine Webber had rated it a strong
buy. (Source:  CNN, “Financial
Adviser Fired Over Enron Advice”, 26 March 2002).  After Mendenhall fired Wu, UBS sent an email to their
clients retracting Mr. Wu’s statement, informing them that Enron stock was
“likely heading higher than lower from here on out.” (Source: New York Post, 4
October 2006).  Of course, we all
know that just several months later, Enron went bankrupt.

We should be cognizant that in light of the Enron scandal,
this level of fraud has not been a recent development. In 2001-2002, a partial
list of companies that had to re-declare earnings due to erroneous information
contained in previous publicly released earnings announcements included the
following companies: Adelphia, AOL Time Warner, Arthur Anderson,
Bristol-Meyers, Squibb, Freddie Mac, ImClone, Citigroup, General Electric, JP
Morgan, Tyco, Worldcom, Dynergy, Enron, General Motors, AIG and Hyundai.  Many of the company names on this list
are the same companies that have been exposed as withholding material
information from their investors about their financial health either in this
year or in recent years. And let us not forget that in the early 2000’s, JP
Morgan, Morgan Stanley, Goldman Sachs, Credit Suisse First Boston, Lehman
Brothers, UBS Warburg,  and US
Bankcorp Piper Jaffray all paid fines between $32,5000,000 and $400,000,000 for
engaging in deceptive and unethical behavior (Source: PBS Frontline, “The
Global Settlement, an Overview”, 28 April 2003).

In regard to such systemic fraud, unfortunately, little has
changed today.  With the blessings
of FASB and our current administration, almost every major bank in the US is
cooking their books today (i.e. consider that, of $4.2 billion of Bank of
America’s declared earnings during one quarter last year, $1.9 billion was
attributable to a non-recurring event, the sale of China Construction Bank
shares, and $2.2 billion was attributable to a fantasy-land valuation of
Merrill Lynch structured notes). 
As I previously stated, though the Enronization of America did not start
with the Enron scandal, the consequences of systemic duplicity have finally
caught up to its perpetrators and have now reached its tipping point today. If
we take a moment to dwell on what aspects of our financial system have been infiltrated
by fraud, it would include our financial ratings system led by Standard &
Poors and Moodys, our mortgage system, our banking system, our equities
analysts and financial analysts, our accounting system, our regulatory agencies
including FASB, the SEC and the CFTC, our media, our politicians, our corporate
executives, and lastly and most significantly, our monetary system. In fact,
though the current media focus seems to be on morally bankrupt financial
executives and institutions, the fact is that this scenario could not have
proliferated over the past several decades if the problem did not run much
deeper than just our financial infrastructure.  If other integral aspects of our society were uncompromised,
they would have flushed out the dishonesty so prevalent in our financial
industry many years ago. So the real question that needs to be examined is  the following - How exactly did fraud in
America become so systemic?

The Fraud of our Legal System

The first phase of the Enronization of America occurred
through our legal system. Most of us make the grave mistake of equating our
legal system with morality, but law and morality are creatures that often
reside at opposite ends of the spectrum under our current legal system.  Since those that make our laws are also
the same immoral people that control our financial system, often our laws have
very little concern with governing morality and much more focus on ensuring
that the very elements that hold power maintain or expand their power.  Most Americans automatically equate a
behavior as right or wrong depending on whether a law defines such behavior as
legal or illegal without any critical thought, and this is a mistake. The fact
is that today, many laws have nothing to do with morality.  In fact, our legal system is laden with
such hypocrisy at times that it allows for the very same behavior to be defined
as legal if a financial elite is engaging in the behavior but illegal if a  “regular Joe” is engaging in it. 

Consider that Richard Strong, CEO of the former Strong
Mutual Funds, admitted to skimming $1.8 million from his clients’ accounts that
essentially was the equivalent of stealing, yet under the auspices of our
current legal system, Mr. Strong was not sentenced to spend a single day in
jail (Source: Washington Post, 23 June 2004). Yet there is little question that
if a hungry, unemployed man steals food equivalent to a fraction of the money
Richard Strong stole, he will go to jail if caught. How is this possible? It is
possible because very little honor is left in our legal system. Stealing $1.8
million may be legal under our current legal system, but it certainly is not
moral. In 2005 and 2006, CEOs from the 11 largest firms in America paid themselves
$865,000,000 in salary even though their “leadership” caused a loss of
$64,000,000,000 of market capitalization in their firms during the same
equivalent time period (Source: BBC News, 22 June 2006).  Yet, if an employee of this firm performed
as miserably as did their CEOs, their reward would almost certainly be a pink
slip, not millions upon millions in bonuses, salaries and perks. Paying oneself
hundreds of millions in salaries and hundreds of millions more in bonuses
despite contributing to unemployment and the substantial loss of shareholder
wealth is certainly unethical, yet it will always remain 100% legal. All you
have to do is review the financial payouts from last year to know that not a
single iota of decency has been injected into our financial system. When firms
like Merrill Lynch went bankrupt and then took money from US taxpayers to pay
their executives more than $4 billion of bonuses, this only added insult to the
injury their bankruptcy inflicted upon many American families.

Were our legal system truly to regulate morality, the
executive suites of America’s largest financial corporations would transform
into ghost towns as a great percentage of these executives would be jailed.
There are numerous actions that are considered “legal” today that would be
illegal if moral and righteous men were making our laws, and even a handful of
“illegal” behaviors that would be re-categorized as legal. Suffice it to say,
if our legal system has been Enronized, our regulatory agencies by default,
have also been Enronized. The Enronization of our Securities and Exchange
Commission (SEC) was never more apparent in their failure to shut down Bernard
Madoff and protect American families even though hedge fund manager Harry
Markopoulos informed the SEC both in writing and by phone of the fraudulent
nature of Madoff’s fund for nine years. During Congressional testimony
regarding this matter, Mr. Markopoulos testified that when the SEC repeatedly
ignored his warnings about the fraudulent nature of Madoff’s practices, that he
feared for his, as well as his family’s safety, a damning indictment of not
only the SEC’s abject failure to regulate, but also of their propensity to
protect powerful men in the financial industry whether they are breaking the
law or not. The continuing failure of other regulatory agencies such as the
CFTC to act in the interests of American people is also apparent in their
recent approval of financial products such as the E-mini Gold and Silver
futures contracts introduced on April 19th, 2009 that settle strictly in cash.
Futures contracts that specifically prohibit the delivery of the underlying
commodity explicitly allow its participants to naked short a commodity with
zero intention of every purchasing or holding the underlying physical asset in
their possession and thus establishing a fraudulent market for a commodity that
can never resemble the free market dynamics of its physical market.  The lesson here is this – if you are a
small player, the regulatory agencies will still prosecute criminal activity,
but if your rank is among the financial elites, they will do nothing.

The Fraud of our Media

The second phase of America’s Enronization has occurred
through the mass media.  Ben
Bagdikian, the author of the seminal work on media mergers and consolidation
titled The Media Monopoly, has noted that almost all major media in the US is
now under the control of five major conglomerates - Time Warner, Disney,
Murdoch's News Corporation, Bertelsmann of Germany, and Viacom.  To be fair and objective in this matter,
there are a handful of major news organizations not controlled by the “big
five”, including The New York Times, The Washington Post, The Chicago Tribune
and Los Angeles Times. However, Badgikian’s basic premise that the problem with
our media is "not one of universal evil among the corporations or their
leaders" nor one of "a general practice of constant suppression and
close monitoring of the content of their media companies",  but one of a contradiction between the
values of free enterprise and the interests of giant conglomerates, is still
valid. Today, many important news stories are reported on the internet by
bloggers well before they attract the necessary viral proliferation to draw the
attention of major media outlets. 
Today, a strong case can be made for the argument that one will find a
greater level of truth and integrity in internet reporting than through major information
distribution channels such as CNBC.

The Destruction of Our Critical Thinking Skills

The fraud of our media has evolved into the fraud
of our educational system. Though this is a topic that commands the devotion of
an entirely separate article, the financial elites have heavily influenced the
curriculum taught at leading American educational institutions for decades now.
For example, over the last century, the Rockefeller family has donated millions
upon millions of dollars to leading economic schools such as the University of
Chicago and Harvard Business School. Perhaps it is the monetary influence of
financial elites such as the Rockefellers that is largely responsible for
erroneous economic beliefs about inflation and our monetary system that persist
today. To squelch much of the skepticism that may arise around the suggestion
that the financial elites would utilize their money to alter the educational
curriculum of leading educational institutions in America, recall that in 2002,
David Rockefeller stated in his own autobiographical memoirs the following:

“For more than a century ideological extremists at either
end of the political spectrum have seized upon well-publicized incidents such
as my encounter with Castro to attack the Rockefeller family for the inordinate
influence they claim we wield over American political and economic institutions.
Some even believe we are part of a secret cabal working against the best
interests of the United States, characterizing my family and me as
"internationalists" and of conspiring with others around the world to
build a more integrated global political and economic structure - one world, if
you will. If that's the charge, I stand guilty, and I am proud of it."

The only difference today is that the cabal working against
the best interests of the US and all American families is no longer secret, but
well documented and well known.  Since
the above statement is sure to stir up cries of conspiracy regardless of the
fact that it is directly attributable to a member of the financial oligarchy,
let us take a minute to consider the disappearance of our critical thinking
skills. Why do those with a keen interest in suppressing the truth about the
origins and nature of our current global financial crisis have great success in
doing so merely by simply using the word “conspiracy” to marginalize the
well-constructed arguments of others? Why do the people that attempt to
discredit these truthful revelations never offer more than flimsy verbal
accusations devoid of any evidence to validate their accusations?  And why do we rarely, if ever,
challenge the fact that the vast preponderance of people that provide the
strongest opposition to the dissemination of truth are those whose personal
wealth depend upon delusional beliefs about the health of our stock markets and
the soundness of our financial institutions and monetary system? Today, the fraud of our institutional education system has dulled our aptitude of
critical thinking to such a degree that we now look to others to do our
thinking for us. Instead of challenging the propaganda that makes zero sense, we are all too willing to be duped into believing
erroneous concepts just because they are written in a textbook or a newspaper.

As a prime example of this, consider over the past decade, the
propensity of Central Banks and the IMF to pre-announce massive gold sales that
they rarely execute. From a purely logical standpoint, can anyone well versed
in logic truly argue one beneficial reason for doing so?  In 1999, when now UK Prime Minister
pre-announced the sale of 400 tonnes, or more than half of the Bank of
England’s gold reserves, his announcement promptly caused gold to plummet to
$250 an ounce, the lowest price in the last decade. For an institution
interested in making profits, it is a foregone conclusion that pre-announced
large sales of gold reserves will significantly depress prices; thus what is
the reason behind such an announcement other than to purposefully depress
prices? Yet, when skeptics are presented with such evidence and can offer no
valid counter-argument, instead of intelligently considering the validity of
another’s viewpoint, too often they shut off their brains and repeat beliefs
that have been repeatedly rammed down their throats.

In the seminal book about warfare, The Book of Five Rings,
legendary samurai Miyamoto Musashi wrote, “true enlightenment can be seen by
what a person has done, not by what he says. Those who have missed the mark may
chatter all day long about this and that, but they have never done anything.
Anyone can make a good argument, but few can show good results.”  If we as Americans wish to prevent the
death of capitalism and to reinstitute our rights of self-determination and our
Constitutional rights to a sound monetary system that are paramount to a free
society, we must judge people not by what they say but by what they do. We must
listen not to those that present hollow arguments and that can demonstrate no
positive track record of results, but rather focus on the thoughtful arguments
of the few that have been able to illustrate the intelligence and validity of
their views because their predictions have been vetted over time.

As a nation, we have become Enronized because we too often
focus on the false arguments of those that are well versed in the art of
persuasion yet persistently demonstrate a poor track record when it comes to
results.  As a prime example,
consider this Congressional testimony where former US Treasury Secretary Hank
Paulson disingenuously claims that he advocates greater transparency in US
markets when in fact, Goldman Sachs, under his direct leadership, aggressively
lobbied to repeal laws that granted financial markets transparency. We are much
too apt to accept the words of people rather than to take the more intelligent
approach of analyzing their actions to judge the validity of their words.

The Fraud of Our Leaders

The final phase of the Enronization of America has occurred
through our power structure and politics. The financial oligarchs that wish to
suppress the truth about their role in this crisis have been very opportunistic
in forming close relationships with the highest echelons of government and then
using this inordinate power to polarize the masses and further consolidate
their power.  The revolving door
among Central Banks (i.e the Bank of Italy, the Bank of England, the US Federal
Reserve), Goldman Sachs, the US Treasury, JP Morgan, and Citigroup has been
well documented so I won’t  repeat
the prolific work of others here. However, using politics or nationalism as a
divisive maneuver is often a favored tactic of the financial elites, so we must
remain vigilant against immoral attempts to deflect our attention away from the
true causes of this crisis, such as the scapegoating of immigrants or other
shameless tactics. In a recent outlook for 2010 that I sent to my paying subscribers, I stated:

"Though bankers and politicians tried to sell 2009 as a year of recovery, this is nothing more than massive deception of the worst kind and hot air. What they delivered to you was not recovery but a big deception."

I further stated:

If the S&P 500 breaks the support level [of 1126-1128] and remains below it for several days or heavily breaks below it on a single day [on higher volume], then look for a downtrend reversal pattern to follow."

The above indeed happened and triggered a two-day, 4%+ slide in the S&P 500 last week. I've informed my subscribers of the other indicators they must follow to know if this is just a correction or the beginning of a long-term slide.  However, with such rampant fraud in all major stock markets last year perpetrated by politicians and bankers, a big crash is inevitable in the world's major stock markets and is a matter of "when" and not "if".  It's a little early to determine if what happened at the end of last week is the beginning of a long-term slide though initial appearances seem to project that right now. A long-term slide will manifest in time, whether now or later. When obfuscation of fact and misinformation systemically
replace transparency and integrity as they have in our modern society, we have
little chance of producing a favorable outcome to this current crisis. More
than 140 US banks failed in 2009, and every single bank failure announcement occurred
on a Friday afternoon after market close so that the revelations of these bank
failures could not adversely affect markets while they were still open.
Additionally, such announcements were timed to grant investors two weekend days
to forget about these failures. America has been Enronized over the past
several decades not because of Democrats and not because of Republicans, but
because of the financial oligarchs that have ruled and continue to rule our
country. The Enronization of America has happened under President Clinton’s
watch, under President Bush’s watch and it is now progressing under President Obama’s
watch.  If you think there has been
a marked difference in monetary and fiscal policy in America during the last 20
years, then you do not truly understund our monetary and fiscal policy.

It amazes me that people still foolishly follow the words of
this administration and not its actions. It amazes me that I still hear people
praising Obama’s proposed plan (proposed being the key word here) to impose
limits on the size and trading activities of the nation's largest banks without
awaiting the resultant actions from such talk. I read one financial journalist
that stated high praise for this proposal as he inferred that banks have become
too big and that a freeze on mergers and acquisitions in the US banking
industry would be welcomed. Did this journalist even consider that the biggest
consolidation of power on Wall Street in the last couple of decades just
happened within the past two years when Goldman Sachs and JP Morgan virtually
eliminated all of their competition and the US Federal Reserve utilized the
very crisis they created to seize even more power? Did this journalist even
pause to consider that this administration’s cabinet and advisory boards
consist of more Wall Street executives than any administration in the last
several decades? Did this journalist consider that the greatest theft of
American taxpayer money occurred under this adminstration’s watch with the $850
billion bailout plan that is now morphing into trillions of dollars? Did this
journalist bother to note that the Senate Finance Committee is now seeking to
increase the debt ceiling by a radical $1.9 trillion after just approving a
$290 billion increase at the end of last year that was necessary to avoid an
unprecedented default on US Treasury bonds? And did this journalist miss the
CFTC hearings regarding the imposition of position limits on energy commodities
and somehow miss that the true nature of discourse during these hearings was
not to ban speculators from creating and bursting bubbles in the commodity
markets but only to ensure, in a round-about-manner, that Wall Street can
continue this speculation?

And after all this, if this journalist still believes
Obama’s comical statement that “the financial system is far stronger today than
it was one year ago”, this is exactly what is wrong with our media today.  Because the deceit, lies and the shady
accounting practices that cover up the true health of all banks in the Western
hemisphere are far stronger today than they were a year ago, the people’s
confidence in the US financial industry may be much stronger today than it was
a year ago. But confidence and reality are two different animals, especially in
today’s chaotic world. If true Glass-Steagall like reforms are indeed
implemented, then I will be the first to commend this administration for acting
differently than any administration in recent history when it comes to reining
in financial greed and fraud. Furthermore, I am much too familiar with the
political game of very public tough talk that often is granted the greatest
media publicity that eventually morphs into a greatly watered down, very
different-looking piece of legislation that somehow escapes the critical lens
of the media. So forgive me if I always reserve my judgment regarding such
tough talk until I see the final iteration of the legislation that passes into
law. My skepticism of this process originates from the fact that administrations
have spoken the same tough game in public for decades while continuing to sleep
with the enemy behind closed doors.

Until we wake up and correct many of the flaws in our thinking
and in our justice system, capitalism has zero chance of survival and any
discussion of reviving free markets is moot. Arthur Shopenhauer, a noted German
philosopher, once stated,

“All truth passes through three stages.  First, it is ridiculed. Second, it is
violently opposed. Third, it is accepted as being self-evident.” 

We have already passed through the
first stage where truth has been ridiculed. For several decades, those that
attempted to reveal the price suppressions schemes executed by governments and
Central Bankers against gold and silver were ridiculed as conspiracy loonies.
Today, the evidence of this manipulation is so overwhelming that men that dwell
firmly inside the confines of the mainstream, men that previously would never
have dared to publicly state such sentiments just 10 years ago, are now
stepping forward and publicly acknowledging the existence of price suppression
schemes that interfere with free markets (i.e., Donald Coxe, chairman of Harris
Investment Management in Chicago).

Today we have progressed to the second stage of truth, when
truth is violently opposed. Former US Treasury Secretary Hank Paulson testified
multiple times in Congress that it is not reality that is important to stock
markets, but only what people think they know, even if what they think is
wrong. Paulson regularly emphasized the vital importance of consumer confidence
to the performance of capital markets. 
In the end, confidence levels measure consensus belief and often have
very little correlation to the reality of underlying economic fundamentals. In
a bear market, such as the one in which we are currently engaged, it is safe to
say that rising stock markets serve as a barometer of deceit. The greater the
deceit by our leaders, the more likely stock markets will act irrationally and
rise when there is no foundation to support the rise, including the most recent
rally that we have witnessed in US markets throughout the latter half of 2009
into the very beginning of 2010. But when reality overcomes deceit, watch out
below, because we will not see a correction, but a crash.

As long as markets react positively to lies that prevent the
masses from understanding the grave situations of our faltering economy and
monetary system, our government and financial leaders will continue to prevent
people from knowing or understanding the truth. One merely has to acknowledge
that last year, FASB conveniently altered mark to market regulations
immediately prior to first quarter 2009 earnings season and immediately prior
to stress tests that were to be conducted on financial institutions to realize
that our current administration is not any more interested in disclosing the
truth or increasing transparency than previous administrations. Again, we would
be wise to remember Miyamoto’s sage advice to judge someone not by his or her
words, but by his or her actions.

The fragility of America’s emotional state regarding the
dire economic situations that existed during the last US Presidential campaign
left America vulnerable to blindly accepting anybody that promised change, but
again we must consider the actions, not the words, of this current
administration.  We must look at
the men appointed to “solve” this crisis and understand that almost all of
these men were handpicked from the same institutions (Citigroup, Goldman Sachs,
and JP Morgan) that were largely responsible for creating this crisis. The most
efficient way to solve a crisis caused by lack of ethics and morals is not to
put the most morally bankrupt people in the nation in charge. It should disturb
us all that our current President appointed a man like Paul Volcker to lead a Presidential
advisory board when Volcker once stated in reference to rising gold prices in
the 1980’s the following:

“That day, the U.S. announced that the dollar would be
devalued by 10%. By switching the yen to a floating exchange rate, the Japanese
currency appreciated, and a sufficient realignment in exchange rates was
realized. Joint intervention in gold sales to prevent a steep rise in the price
of gold, however, was not undertaken. That was a mistake.”(Source: Volcker’s
memoirs printed in the Nikkei Weekly, November 15, 2004). 

Men that clearly state their opposition to free market
mechanisms and the reliance on collusion as preferable to transparency and
integrity should never be appointed to any position of leadership in our
country.  Despite the lack of
leadership from the financial elites during this crisis, they have made it
clear that their agenda of concealing the truth from us will not prevent them
from shamelessly pinning us with the blame for their errors by increasing our
taxes and devaluing the purchasing power of our dollars. And remember,
devaluing major currencies, which no sane person can deny is happening all
around the world, is the quickest way to destroy capitalism. It is for this
reason that bankers are currently digging capitalism a shallow grave right now.

Though our governments have aided and abetted our global
financial crisis which will soon enter its second phase, they have not been the
root cause or the prime perpetrators. This honor belongs to the financial
oligarchs and the fraudulent monetary system they have instituted. Today,
governments have devolved into nothing more than an instrument of execution for
the financial oligarchs. The late great John F. Kennedy was the last US
President to understand and recognize the massive flaws and immorality of our
modern day monetary system. Were the honorable President Kennedy still alive
today, but a regular citizen, voicing the exact same displeasures against our
current monetary system as he did half-a-century ago, I have little doubt that
those in power would have already marginalized his arguments and labeled him as
a “conspiracy buff” with a lack of sensibilities.

Can We Save Capitalism?

The lack of transparency and the veil of secrecy that has existed
in our financial world for a very long time now have enabled the imminent death
of capitalism. Just think about some of the parlance that now is commonplace in
our global marketplaces like “dark pools”, where discovery of market prices has
become opaque and difficult, yet grotesquely accepted as normal. Furthermore,
the misinformation campaigns that the financial elite have engaged upon for
decades have further supported and maintained the ignorance of the masses. If
one merely focuses on gold and silver markets, one can uncover a mountain of
deceit.  Consider that when Central
Banks lease gold, they still claim it as an asset on their balance sheets, an obviously
fraudulent practice.  

In the end, let us not look to the words of our financial
and government leaders for truth, but to their actions. If there has ever been
another institution in the history of America with a persistently worse track
record of accomplishing their stated mission than the US Federal Reserve (that
of maintaining price stability), I cannot think of one. Thus, we should
permanently shutter institutions that have a track record of utter failure and
that have consistently failed to act in the interests of their citizens
although they may repeatedly insist that they always act in the nation’s best
interest.  We should all want
results and supporting actions, not unfulfilled pledges and promises year after
year, and decade after decade. Enough is enough. We should also permanently
shutter those financial institutions led by corrupt executives that have
cumulatively made billions from the purposeful deception and bankrupting of
American families.  Finally, if you
are a shareholder with voting rights, it is incumbent upon you to exercise your
rights at general meetings to oust all corrupt directors and executives at
corrupt firms. Because it is near impossible to regulate morality, the only
sustainable solution to prevent the death of capitalism is to remove the very
institutions and people responsible for this process. As current administrations
of major governments all around the world have demonstrated an unwillingness to
do so, it is patently clear that this movement must originate from the people.

If we all desire the freedom of self-determination that is
impossible with a corrupt monetary system, this change will have to come from
the people. If there is one thing about the monetary system that I believe with
all my heart, it is this. The monetary system today, as it has been structured
by Central Bankers, is immoral. The current monetary system stifles, not
encourages free markets. If a free market system facilitated capitalism in the
world’s major markets today, the middle class would be healthy and robust, the
poor would be transitioning into the middle class, and the rich, while still a
healthy component of society, would not increase their proportion of wealth
relative to everyone else every year. Instead, in the absence of free markets
and capitalism, the rich seize more and more resources every year, the middle
class shrinks every year, and the poor become poorer. If every person in this
world truly understood how the monetary system operates, whether a Muslim, a
Christian, a Hindu, Buddhist, a Catholic, or of any other faith, I am 100% sure
that that person would be opposed to our current monetary system based upon his
sense of morality provided by the most important tenets of his or her religion.
In The Economic Consequences of the Peace, John Maynard Keynes stated the
following:

“Lenin is said to have declared that the best way to destroy
the Capitalist System was to debauch the currency. By a continuing process of
inflation, governments can confiscate, secretly and unobserved, an important
part of the wealth of their citizens. There is no subtler, no surer means of
overturning the existing basis of society than to debauch the currency. The
process engages all the hidden forces of economic law on the side of
destruction, and does it in a manner which not one man in a million is able to
diagnose.”

If you don’t
understand the above statement, then I urge you to research Central Banks and
how they operate until you do. And when you do, you will understand why I claim
that no man or woman that calls himself a good Christian, a good Muslim, a good
Catholic, or a good Hindu could support our monetary system or work for a bank
today in good conscience. If you are skeptical of this comment, as you should
be, then I urge you to investigate and understand how the monetary system truly
operates before you declare your opposition to this statement. Try to explain
in words, to another friend, the complete process of how money comes into
existence from the first step of being printed by Central Banks until it ends
up in your wallet, along with every party that is charged interest or taxed  along the
way during this process (through multiple mechanisms) including the government and the government’s transfer
of this “interest tax” to the people. 
Until you can verbalize every step of this entire process, one should not claim that he or she
understands our monetary system.  But when you can verbalize this entire process, it will
become very clear to you why Lenin stated that the best way to destroy
Capitalism is to destroy the purchasing power of money. You will understand the
extreme hypocrisy of Goldman Sach’s CEO Lloyd Blankfein’s statement that
bankers were doing “God’s work” when you realize that our modern monetary
system breaks the 8th commandment of “Thou shall not steal.” Furthermore, you
will understand that while Goldman Sachs undoubtedly deserved the bulk of
criticism levied against it last year,  private banking families that
established Central Banks, not Goldman Sachs, have created our fraudulent monetary system.
As is the case with other large commercial banks, Goldman Sachs is just an enabler, participant and beneficiary of the corrupt system.

If we all desire free gold and silver markets that are not
persistently rigged by the US Treasury, the US Federal Reserve, the Bank of
England and the likely usual suspects Goldman Sachs, HSBC, and JP Morgan, then this
change will have to come from the people. If we desire free markets of any
kind, in any form, this change will have to come from the people. Too many
times in the past decade, politicians have promised change only in word but no
real change has ever resulted from their actions. This clearly demonstrates
that the financial oligarchs are the real power backing all major governments
today.  The alternative consequence
of our inaction will be the manifestation of Shopenhauer’s third stage of
“truth as self-evident” at a not-so-distant time in the future. Unfortunately,
however, if truth becomes self-evident, this will undoubtedly mean that the
bankers will have succeeded in transforming the middle class of many Western
nations into the poor. In reality, if we enter the third stage of monetary
truth when truth becomes self-evident, it will be too late for most to take any
action that will have any consequence in assisting their families.  The time for action clearly is now –
when we are still in Shopenhauer’s second stage of truth  – the stage when all truth is violently
opposed. Two movements that provide actionable ideas to implement right now
that will help reinstate capitalism and revive capitalism from its deathbed can
be found at Move Your Money and Sound Money Now! Instead of just complaining
that our lives are being ruined by bankers, all of us would do well to take countermeasures
today in an attempt to save capitalism.

JS Kim is the Managing Director and Chief Investment
Strategist for SmartKnowledgeU, LLC, a fiercely independent investment
education, research, and consulting firm that provides visionary guidance and
profitable strategies to deal with the ongoing systemic fraud of our monetary
system and capital markets.

Comments

[Screwball]

Nicely done, thanks for sharing.

[Anonymous]

"If there has ever been another institution in the history of America with a persistently worse track record of accomplishing their stated mission than the US Federal Reserve (that of maintaining price stability), I cannot think of one."

and this raises an even more pertient question: should the fed even be responsible for price stability....i argue no as does the brilliant antal fekete....of course i argue for the complete abolition of the central bank..

prices fluctuate for reasons which cannot be tracked or isolated....however, i do believe that interest rate stability is far more important and this is achieved best with a non-fiduciary based gold standard....interest rate stability in turn facilitates price stability without chasing false causes....

price stability is one of those fraud exercises which admits of mischief and wrong headedness....and yet we saw remarkable price stability during the aegis of the flawed gold standard....but causality came from interest rate regulation via the gold standard....

[Enkidu]

Excellent excellent article - blunt, direct, deeply true. All the fraud is facilitated and perpetuated by the controlling elites.

[Anonymous]

"Were the honorable President Kennedy still alive today, but a regular citizen, voicing the exact same displeasures against our current monetary system as he did half-a-century ago, I have little doubt that those in power would have already marginalized his arguments and labeled him as a “conspiracy buff” with a lack of sensibilities."

they did one better than that....the oligarchs who have brought us the present engineered financial catastrophe also murdered kennedy....the cia lead a consortium of establishment respectables in the pentagon, jcs, fbi, secret service, national security agency, mob, and cuban exiles in the plot to murder kennedy who was deemed a traitor....

i will leave aside the foreign affairs component to deal with the domestic...the steel crisis of 1962 had some of the qualities of the present crisis though in much much smaller scale....but the point is that kennedy went to battle against the executives who had lied to him about a deal...those same business leaders through henry luce in fortune magazine issued a threat to kennedy to beware the ides of april....this was not a rhetorical flourish - it was a direct threat....one which would be carried out in november of 1963.....

i know this is off topic but it is very relevant to the project of saving free enterprise and rescuing the republic....

[Anonymous]

"Men that clearly state their opposition to free market mechanisms and the reliance on collusion as preferable to transparency and integrity should never be appointed to any position of leadership in our country."

amen and amen....i stated in another thread that volcker would not be any better than benhole....the man is old enough and distant enough to be seen as benign but in fact is a complete and total fraud who modeled for greenspan and bernanke how to manipulate markets....

and don't forget the famous utterance of alan blinder who is now a professor-crook some where but once was vice chairman of the fed who stated that the last obligation of a central banker is to tell the american people the truth.....

and thus we worship educators / professors - and it's not just blinder - who have taught principles used by managers and leaders who have presided over the complete undoing of the american economy....there is a correlation between higher education and lower results just as there is - i argue - causality...

[masterinchancery]

Great article--"sauve qui peut"!

[Anonymous]

"Until we wake up and correct many of the flaws in our thinking and in our justice system, capitalism has zero chance of survival..."

mmmm....that's a tall order and i am going to throw some cold water on this....behind all of the levers of official government are the oligarchs and their henchmen - one of the most effective being the cia....

eisenhower and truman both warned of this menace the former using the oblique term military industrial complex.....fletcher prouty, deceased col in the us air force, told of his assignment as coordination officer beginning in 1955 to assist the cia in infiltrating federal government departments....this is precisely whereof eisenhower spoke...

until people recognize that the vampire squid banks form an interlocking web of strangulation with the stealth intelligence agencies they will never kill the monster....

it is highly instructive to read about co-existence of the bank of england - starting in 1694 - and its intelligence operations....they go hand in hand....

many of the relationships which are conspiratorial operate on shared beliefs and goals such that one need not expose a smoking gun - there is frequently not one insofar as compartmentalization is successful....

but i assure you that the lockhold of the cia is powerful and firm on america and must be dealt with as frank church so bravely attempted in c. 1975....unfortunately he only scratched the surface....

one of the tensions of type a control freaks and others trying to make a living is the desire reduce uncertainty through bureaucracy vs those who have an entrepreneurial risk taking personality....for honest people there is a battle one this point....where the evil people triumph is in using this tension as a stepping stone for absolute control to preserve their inalienable rights to power...

[Cistercian]

 Epic truth there.Excellent.

  Most people have no idea how powerful the intel apparatus has become.Totally insane with power too.They are very dangerous.

[Benthamite]

I think we agree in general sentiment.  The US maintains its power and the kind of local conditions it prefers by fostering whatever political elements are the most reactionary and repressive in the given country; compare the Chinese Communist insistent protection of Pol Pot in Cambodia and their justification of the Burmese dictators.  The control over empires has always been of importance to the rulers rather than to its people, and the importance is primarily for their economic gain. 

Beware their stressing the loyalties of the population, especially in religion ("God's work") and national identity and traditions.  These interests and attitudes-anthropological or "national" culture-do not have inherent validity or truth, and differ from the "high" culture in art and science and thought that expresses the emotional and intellectual condition of humanity with little or no regard to the nation.  The anthropological or national cultures express merely whatever has grown in earlier stages of development, whether from people's problems with the world or from inculcation by their rulers; it is generally backward-looking and unhelpful to any advances.  

[Anonymous]

are you speaking about the impressing of art
into the servitude of the state and its goals -
goals which are often imperialistic? or to take
the point further are you speaking about the use
of cultural artifacts for stirring up the people
to serve the self-aggrandizement of their leaders'
national ambitions?

i think that what i hear from you is that there
is art which speaks to the human condition
which is the high art, while cultural art or
maybe even jingoistic art / culture is tapped for
nationalistic or political aims....

maybe you could clarify your thoughts a bit...

[Gimp]

Great article.  Yes we do live in a society run by the few who will do anything to keep power as JFK found out.

The thing that scares me the most is  what usual follows Capitalism is Fasicism  - how long we have until this happens is anyones guess. 

[percolator]

Sorry to be the bearer of bad news Gimp, but Fascism is here and now and it just got shifted into overdrive with the recent Supreme Court ruling allowing corporations to fund politicians.

Great post JS Kim!

[damage]

Why don't you actually read the decision first, before making stupid comments?

McCain-Fiengold was about the state being able to restrict speech around election time. It basically bans any attack ads if they don't like the way they are funded, also bans any attacks on state sponsored propositions. You've been fed a lie by the idiot left. So now please explain to me how having this piece of shit struck down was a bad thing?

Please, I'd love to hear your logic supporting this. You are completely misunderstanding the decision because you must trust idiots to deliver your news to you. I cannot find any other explaination for the trove of moronic dipshittery bashing this decision.

[Miles Kendig]

Damage - I am no fan of limiting the right of free speech.  In fact, I have suffered mightily to defend it.  However, I am no fan of bestowing the rights of citizenship upon a non person which is what a corporation is.  In effect I am left wondering where in our founding documents resides the idea that a corporation, labor union or a nonprofit organization is entitled to super-citizen status (all the rights and privileges without the potential of prison) under the law?

[damage]

Then you still aren't getting it... the politicians will get funded by corporations or whoever, that decision wouldn't have changed anything in that respect... the only difference is the establishment does not have a clear way to protect themselves against well... criticism which should be totally lawful political speach... which well.. is a very good thing and you should be happy instead of trying to bash a very very very good decision... the people need to learn to elect those who are not corrupt... the government trying to protect itself from corruption is the biggest joke imaginable... it just means they will protect themselves from the interests of the people... the decision didn't make it legal to take bribes either... which is basically what you've been asserting and that isn't even the case...

[Anonymous]

Amen!

[Anonymous]

How much stock can you give someone who thinks its a "fact" that the bank bailout happened under the current administration when in fact it happened under the last administration. I am not a big fan of either one, but to sit there and draw an argument from such simple to check factually incorrect statements makes everything you say sound like nothing more but an uninformed rant. Clearly SmartKnowledgeU needs to learn how to do some basic fact-checking.

[waterdog]

Where are your facts? I see his listed in his post.

[Anonymous]

you are majoring in the minors...the bank and
corporate bailouts have been supported equally
by the obushma administrations...

[Anonymous]

"well versed in the art of persuasion yet persistently demonstrate a poor track record when it comes to results. As a prime example, consider this Congressional testimony where former US Treasury Secretary Hank Paulson disingenuously claims that he advocates greater transparency in US markets when in fact, Goldman Sachs, under his direct leadership, aggressively lobbied to repeal laws that granted financial markets transparency."

this is another psychological warfare technique....obama is a master of sorts of this....the reason why he is not really effective except with artichokes is that he has no credibility or gravitas.....

but the technique is to say yes sir yes sir three bags full and the sheeple buy it because they are too stupid to think or fight....a nation raised on ritilin is not going to cause too many problems...

as the supreme airhead of the universe, mr paris hilton on estrogen, obama has never done anything substantive in his life....he stated that his best qualification for being president was that he had run a successful campaign....

and i argue that he did not even do that....rather he was given over 2.2b usd in free air time and a swooning press and cheese souffle headed college kids....

obama will make jimmy carter look churchillian....and for the tards who might think i am a republican, i can assure you that the bushes are mass murderers....www.ae911truth.org....

i will never vote dem or repub again in my life...

[Anonymous]

"Bankers are destroying Capitalism. Unfortunately, most Westerners won’t realize this until five years from now, when the middle class has been forcibly relegated to the ranks of the poor."

It is naive to think that only if the financial system was reformed, the system would be "fair" and the middle class would be saved.

Capitalism is nothing more than a modern day form of slavery, no matter what the banks do or do not do. Wages tend to be driven down to low levels because Capitalists always seek the lowest cost labor. That's why the U.S. lost its manufacturing base.

[Anonymous]

capitalism is a poor tern to describe a phenomena
i describe as free enterprise....

all endeavors require some trade-off between
labor and capital - even in communistic and
other totalitarian societies....so if you are
inveighing against capital you are running a
fool's errand...

but i agree that some old fashioned tarrifs are
needed to protect jobs...but on the other hand
wages are not the only driver in capital flight -
something which very very few minds understand...

the regulatory, tax, and monetary policies are such
that capital has fled america and as the author
noted indirectly is due to a corrupt monetary
system....interest rates have fallen into
disequilibrium for so long that capital has up and
left....

the manufacturing base is not so critical except
insofar as we have sacrificed it needlessly....but
to the extent that we live in an information and
technology age, those investments in the latter should be fostered
as they promote capital formation and higher productivity
and hence jobs...

[twotraps]

agree.  let the bottom of the pyramid make what they perceive to be the best economic decisions for themsevles....and so forth up the chain.

[Anonymous]

Truthfully....The media is owned....

Only those who can pay the big bucks control the sheeple....

........................................

The day of the internet is coming even closer....

........................................

ZH is showing the next way to better information....that allows its readers to interact....

Interactive live information that tells it like it is....is going to dwarf the high dollar old ways....

......................................

Good going ZH....You knew the need ....and are filling it ....

The day one can bypass the propaganda both political and corporate .....is arriving....

[gookempucky]

This just in from News World Communications-----------Reverend Sun Moon say you guy break me up and I cantwoll youzzzz.

http://www.gorenfeld.net/book/

[Anonymous]

"If we as Americans wish to prevent the death of capitalism and to reinstitute our rights of self-determination and our Constitutional rights to a sound monetary system..."

although i posted this already once, it bears repeating....
if you have not read ed veiera you owe yourself the favor of reading this interview....

http://www.goldstandardinstitute.com/html/Interview%20with%20Dr.%20E.%20...

[Anonymous]

"Why do those with a keen interest in suppressing the truth about the origins and nature of our current global financial crisis have great success in doing so merely by simply using the word “conspiracy” to marginalize the well-constructed arguments of others?"

the answer my friend is blowing in the bowls of the mkultra / operation artichoke program of the cia....the oligarchs control of the media and educational establishments and torrid dumbing down of everything in education or life, coupled with pixie dust of american exceptionalism, and the pate de foie bullshit of intimidation by ridicule is the secret of the success....

i remind sheeple that machiavelli wrote the prince to systematically discuss the continuous presence of conspiracies emmanating wherever two or more people are gathered in the name of politics and power...

people have been sheepified and homogenized by the circuses of entertainment, anesthesitized by the pablum of public education, and intimidated by the miasma of credentialism...

operation paper clip brought to america brilliant psychological operations experts....they ply their trades to the present day....the mirage of the prince fools the sheeple and the indolent mind....

[JR]

And now America has Obama’s Information Czar Cass Sunstein overseeing America’s “information quality” and possibly already using paid informants to hunt down “conspiracy theorists.”

He’s the guy, says Glenn Greenwald, who proposed in 2008 that  “the U.S. Government employ teams of covert agents and ‘pseudo’-independent advocates to ‘cognitively infiltrate’ online groups and websites, as well as other activist groups – which advocate views that Sunstein deems ‘false conspiracy theories’ about the Government.”

Czar Sunstein defines false "conspiracy theories" to mean: "an attempt to explain an event or practice by reference to the machinations of powerful people, who have also managed to conceal their role."

Getting chilly, isn’t it?

And, oh yes, he proposes that the Government make secret payments to these so-called "independent" credible voices to bolster the Government's messaging, on the grounds that those who do not believe government sources will be more inclined to believe those who appear independent, while secretly working on behalf of the Government.

And if that isn’t conspiracy, I don’t know what is.  And, like pornography, I know conspiracy when I see it.

[Yardfarmer]

It has been rightly perceived that in the ability to enlist the support of the masses either through persuasion or coercion lies the key to power through the creation or elimination of political, religious and socio-economic institutions. One encounters this elemental struggle in every level of human interaction but nowhere are the effects more acute and critical than in the political sphere. People quite naturally gravitate to centers of power in an attempt to ensure and sustain their collective survival. And just as surely do these foci need the support of the mass consciousness to survive. The attempts to control and manipulate the human mind involving the entrainment of brain waves through binaural beats and similar sound wave modifications found in frequency modulation and television transmissions as well as the experimentation involving extreme low frequency (ELF) brain wave patterns by applications of Tesla technology In the High Altitude Auroral Research Project (HAARP) represent some of the most significant efforts to bypass ordinary human consciousness to dominate, subjugate and control the human mind through subliminal electromagnetic stimuli.

[Anonymous]

our society is wall to wall sound perhaps for the
reason of channeling or carrying these influences
you describe....

we have lost the love of the sound of silence...

but even low tech solutions such as tv, radio,
entertainment and banality ad infinitum enveloped
in an impenetrable wall of rules is sufficient
to virtually imprison most folks....

don't you dare ever fuck with my dancing with
the stars is the attitude...

and the pervasive use of drugs as medicine - ritilin
being my favorite example - to induce mass
hypnotism....go to youtube to watch dr blaylock's
fascinating discussion of vaccines and how toxic
and sometimes lethal they are....this is fraud
and hoax on mankind....

blaylock is an outstanding medical doctor - he
opened my eyes about a lot of stuff i had taken
for granted...

[alien-IQ]

Wonderful article. Thank you. I loved it.

[Anonymous]

the rockefeller quote should silence all conspiracy deniers and cia disrupters who come to this site but alas it will not.....it should also send a chill down the spine of anyone who values freedom...

one half of the rockefeller / rothschild axis of evil admits to aims of world domination and people still deny it...this is why this country is doomed....

[Anonymous]

In the end, it's all about Morgans, Rockfellers, Fairchilds, etc. It's been like this for centuries, why would it change now... :(

[Budd Fox]

Though I can relate and share much of the content...the final scope is to tout gold and "junior miners shares" as I paraphrase from the website of Mr.Kim. I have just a major problem with gold, that reverting to it as a payment method, either there is simply not enough of it to keep the payments system running...or the prices of ALL the assets in the world in gold term are so out of whack that each and any of us holding any asset except phisical gold are definitely, and finally, ruined and paupers.

The consequences of that, will be that not even gold will represent anything, but only a solid rifle and a good supply of ammunition will carry some tangible value of any sort....

Nevertheless, the urgence to moralize many aspects of today's life are condivisble...with one caveat; the take down of an entrenched oligarchy can be achieved only with a violent social convulsion carried to the extremes of an armed clash.

I am not ruling out this may not be needed...I will just find it a sad outcome. To be safe, I own a solid rifle and an adequate supply of ammunitions i strongly wish never to have to pull out from the armoured safe.

[Anonymous]

the largest "commodity" market by far in the world
is the gold market....there is much more traded
than folks know....gata published a great article
on this topic...it towers over the size of the oil
market...

there is enough gold - and its junior partner silver -
to handle the business of the world...there
was enough in 1913 to handle world trade settlements
and real bills....world trade never recovered to
its 1913 level until the 1990s....

whatever gold is available would be revalued
and calibrated to the size of financial
transactions....
measuring wealth and transactions by weight is
the new mindset which folks should acquire....it
is a real eye opener....especially to have a
real numeraire as a comparand....

[Mr Lennon Hendrix]

silver.

[Anonymous]

"has noted that almost all major media in the US is now under the control of five major conglomerates - Time Warner, Disney, Murdoch's News Corporation, Bertelsmann of Germany, and Viacom...."

bet he didn't quote bill colby who said that every major newsman is controlled by the cia...of course colby met an unexpected demise to put it in highly euphemistic terms....

http://www.pythiapress.com/wartales/colby.htm

the newsfakers - as orwell warned - give you so much information that you think you know it all when in fact you have been cotton candy to rot your teeth and bones...newspeak is spoken with factoids and and absence of a point of view except that of disinformation.....

if you can't dazzle them with brilliance baffle them with bullshit....

[Thorny Xi]

When "the sheep stop behaving like sheep" they will have a chance.  Sadly, the chances of that happening are the reason that dogs are so successful in herding them. 

[Carl Marks]

Indeed, Thorny. The author does a good job of describing human nature doesn't he?

[Anonymous]

Yeah, herding them with lying, cheating, stealing and unemployment.

[Anonymous]

" Futures contracts that specifically prohibit the delivery of the underlying commodity explicitly allow its participants to naked short a commodity with zero intention of every purchasing or holding the underlying physical asset in their possession and thus establishing a fraudulent market for a commodity..."

yes and the cftc recently passed restrictions in certain commodities which limits longs but does absolutely nothing to limit shorts....which means that they are egregiously rewarding short selling because no one could ever go long enough according to new rules to cover an even larger short position....it's now legal to be a crook and financial terrorist....

and the wicked leaders of the cftc can primp and preen with "plausible deniability" that they did something by going after long positions....

[twotraps]

honestly, can we expect the CFTC to understand the contracts they watch over??

[Anonymous]

oh my god i am getting to the good stuff....this is the best article on zh in ages.....

"Mr. Markopoulos testified that when the SEC repeatedly ignored his warnings about the fraudulent nature of Madoff’s practices, that he feared for his, as well as his family’s safety,..."

madoff was an intelligence operation....it is much deeper than most folks know.....that is why the warnings were shit canned and innocent lives were at risk.....

folks need to start connecting the dots.....

now i need to get back to the superb article...

[Anonymous]

please consider me one your greatest fans and cheer leaders....this was symphony music....

"Self-regulations and regulations imposed by morally bankrupt people within a broken and corrupt system have never been effective. That’s why I have zero expectations about the efficacy of any new regulations being proposed today beyond their efficacy as a highly efficient smokescreen for politicians to hide behind."

the best regulation in the financial markets is moral hazard...take that away and all you have is fraud, corruption, and cancer....

thanks for reminding us of enron (i am still reading so don't know if you got worldcom and other brazen acts of financial terrorism done under the guise of probity and circumspection....)

[Anonymous]

Chung Wu - I knew him at the time and it was an unbelievable thing that happened to him. Here was a guy that should have received some kind of award for alerting people to what was going on, and yet he was fired and, although he is still in the business the last time I saw him, has never been given his just dues. Mr. Mendenhall, on the other hand, continued to reap the rewards of being the manager of an office with a couple of huge stock option plans. There were rumors that he was shorting Enron stock at the time, but don't worry - it was “likely heading higher than lower from here on out.” (Source: New York Post, 4 October 2006).
Recently word is the Mr. Mendenhall was let go after he was no longer needed by UBS on the payroll since the Enron thing had blown over. Make no mistake about it- Chung Wu should be working in the highest levels of the Financial Advisor business, but because of the "system," he got screwed.

[JR]

Yes! “This change will have to come from the people.” A powerful piece, JS Kim, paralleling in impact Thomas Paine's political pamphlet, Common Sense. that “brought the rising revolutionary sentiment into sharp focus by placing blame for the suffering of the colonies directly” on the perpetrator.

How does our financial system perpetuate the fraud?  They do it through blackmail, payoffs and violence… And now we have the fear of violence.There is a way to stop it; because it’s all connected.  Break the center—the NY Federal Reserve--and the tentacles die. 

[boiow]

good post, will enjoy reading the comments on this one.

i think the most positive thing we can do is celebrate the end of the status quo.

[crzyhun]

I agree with many points in your long polemic. And, it is up to individuals to keep their own council. Keeping the right balance of trust and verification is hard.

Step one: Rich off our backs

Step two: Poor off our backs

Step three: Government off our backs

Step four: Corporations off our backs

Step five: Political parties off our backs

Step six: Religion off our backs

[Anonymous]

How does the revolution start?

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