Paul Farrell Explains Why The Fed-Wall Street Complex Will Self Destruct By 2012

Tyler Durden's picture

Some rather scary predictions out of Paul Farrell today: "It’s inevitable: Wall Street banks control the Federal Reserve system,
it’s their personal piggy bank. They’ve already done so much damage, yet
have more control than ever.Warning: That’s a set-up. They will eventually destroy capitalism,
democracy, and the dollar’s global reserve-currency status.
They will
self-destruct before 2035 … maybe as early as 2012 … most likely by
2020. Last week we cheered the Tea Party for starting the countdown to the
Second American Revolution. Our timeline is crucial to understanding the
historic implications of Taleb’s prediction that the Fed is dying, that
it’s only a matter of time before a revolution triggers class warfare
forcing America to dump capitalism, eliminate our corrupt system of
lobbying, come up with a new workable form of government, and create a
new economy without a banking system ruled by Wall Street
." And just like in the Hangover, where the guy is funny because he's fat, Farrell is scary cause he is spot on correct.

Handily, Farrell provides a projected timeline of events:

Stage 1: The Democrats just put the nail in their coffin confirming they’re wimps when they refused to force the GOP to filibuster Bush tax cuts for billionaires.

Stage 2: In the elections the GOP takes over the House, expanding its strategic war to destroy Obama with its policy of “complete gridlock” and “shutting down government.”

Stage 3: Post-election Obama goes lame-duck, buried in subpoenas and vetoes.

Stage 4: In 2012, the GOP wins back the White House and Senate. Health care returns to insurers. Free-market financial deregulation returns. Lobbyists intensify their anarchy.

Stage 5: Before the end of the second term of the new GOP president, Washington is totally corrupted by unlimited, anonymous donations from billionaires and lobbyists. Wall Street’s Happy Conspiracy triggers the third catastrophic meltdown of the 21st century that Robert Shiller of “Irrational Exuberance” fame predicts, resulting in defaults of dollar-denominated debt and the dollar’s demise as the world’s reserve currency.

Stage 6: The Second American Revolution explodes into a brutal full-scale class war with the middle class leading a widespread rebellion against the out-of-touch, out-of-control Happy Conspiracy sabotaging America from within.

Stage 7: The domestic class warfare is exaggerated as the Pentagon’s global warnings play out: That by 2020 “an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge” worldwide and “warfare is defining human life.”

It gets worse: Farrell postulates that the closer we get to the Mad Max moment, the less those in charge will discuss this "optionality" of the end of the world trade.

In this rapidly unfolding scenario, the Fed cannot survive. Why? Not because the Fed is at the center of America’s economic problems, beyond repair, a dying institution. But because the Fed is a pawn of Wall Street’s Happy Conspiracy, which is incapable of seeing the train wreck that it set up.

This out-of-control, conspiracy of greedy Wall Street bankers, corporate CEOs, corrupt politicians and Forbes 400 billionaires will, in the near future, trigger the third catastrophic meltdown of the 21st century, a collapse that paradoxically can transform America into a new, stronger post-capitalist economy … but only after a revolution and brutal class warfare. But few will talk about what’s coming.

The problem is that by using a simple metric suggested by Nassim Taleb, there is nobody Americans can trust to be the bearer of bad news, which is why everyone is and will be responsible for their own well being.

Here’s Taleb’s “simple metric for judging whose economic opinions are worth his time: ‘Did someone predict the crisis before it happened” in the past? “If the answer is no, I don’t want to hear what the person says. If the person saw the crisis coming then I want to hear what they have to say” about future crises.

Taleb target No. 1: Treasury Secretary Tim Geithner, who spoke just before Taleb at the forum. Of course, experience tells us you really can’t trust anyone in government. All politicians fudge the numbers, cherry-pick data to suit their personal goals, biases and political rhetoric.

Remember Hank Paulson, Wall Street’s Trojan Horse inside Washington? Earlier he had made over half a billion as Goldman’s CEO. Back in July 2007 before the meltdown he bragged to Fortune that this is “the strongest global economy I’ve seen in my business lifetime.” Never trust anything “leaders” like him say. Never. Worse, he and our clueless Fed Chairman Ben Bernanke later lied to the
public that the subprime crisis was “contained.” No, my friends, you
cannot trust politicians and government insiders. Never.

Others whose opinions can be summarily dismissed include economists and authors:

Taleb warns: Nobel economist Krugman not only supports Keynesian deficit spending, he favors the “transformation of private debt, with all the moral hazard it entails, into public debt” that’s toxic from a “risk standpoint.” Worse, it’s “immoral.” Our “grandchildren should not bear the debts of the grandparents.” OK, add Nobel economists to the list of people Taleb says you can’t trust to speak “the truth.

Actually, using Taleb’s “metric,” you can’t trust any economists. Why? Because all economists, even the best, are capable of making catastrophic errors: Remember Greenspan’s sad apologies during congressional hearings after undermining America for 18 years. And remember Michael Boskin’s classic $12 trillion error? Bush Sr’s chairman of the Council of Economic Advisers, a respected Stanford economist, attempted to justify some cockamamie logic that his newfound Social Security savings would lower America’s debt, giving a political boost for his party. He was $12 trillion wrong.

No, folks, you can’t trust any economists, they’re just average humans. Most have strong political biases. They’re hired mercenaries who say whatever their employers ask them to say, pawns working for some Wall Street bank, corporation or politicians.

Yes, Allan reveals another character Taleb can’t trust for economic advice. Prizewinning authors like NY Times columnist Tom Friedman who’s book, The World is Flat is “very bad for society,” misleading, having failed to “assess risk.” So scratch celebrity authors from the list you can trust to tell you the truth about the future of America.

The circle of mistrust obviously includes all the corrupt idiots who control over the sheeple:

Taleb is merciless when it comes to politicians like President Obama, Congress and The Fed chairman: You can’t trust any of them. Earlier Bernanke’s reappointment “stunned” Taleb: He “doesn’t even know he doesn’t understand how things work or that the tools he uses are not empirical,” wrote Taleb in HuffPost. But it’s “the Senators appointing him who are totally irresponsible ... The world has never, never been as fragile,” and we’re stuck with an economist running The Fed whose methods make “homeopath and alternative healers look empirical and scientific.”

Obama’s reappointment of Bernanke left Taleb so distraught he “withdrawing into the Platonic tranquility of my library, to work on my next book, find solace in science and philosophy, and … structure trades betting on the next mistake by Bernanke, Summers and Geithner.”

Taleb’s “metric” essentially warns Americans to trust no one, certainly not Washington and Wall Street insiders. The vast majority fail his simple metric, “Did someone predict the last crisis before it happened? ... If the answer is no, I don’t want to hear what the person says. If the person saw the crisis coming, then I want to hear what they have to say’.”

Follows listing of some of the biggest hypocrites in the world:

Bernanke: “I don’t anticipate any serious failures among large internationally active banks.” Wow, was he ever wrong.

Billionaire Ken Fisher: “This year will end in the plus column ... so keep buying.” Main Street lost trillions on advice like this.

‘Mad Money’ Jim Cramer: “Bye-bye bear market, say hello to the bull.”

Goldman Sachs’ Abby Joseph Cohen: “The fear priced into stocks is likely to abate as recession fears fade.” Soon after, Goldman was essentially bankrupt.

Congressman Barney Frank: “Freddie Mac and Fannie Mae are fundamentally sound.”

Barron’s: “Home prices about to bottom.” Three years later they still haven’t

Worth: “Emerging markets are the global investors’ safe haven.”

Kiplinger’s: “Stock investors should beat the rush to the banks.” Costly advice.

Bernie Madoff: “It’s virtually impossible to violate the rules.” But it’ll happen again.

To be sure, some continue to spit in the face of docile complicity and warn the world about what will happen:

These twenty did
warn America between 2000 and 2008. Although few listened: We reported
on warnings from economists Gary Shilling, Marc Faber and Nouriel
Roubini, the St. Louis Fed president (Greenspan ignored him, just as
Bernanke is ignoring the Kansas City Fed president today), former Nixon
Commerce Secretary and SEC chairman, billionaires Warren Buffett and
oilman Richard Rainwater, institutional portfolio managers Jeremy
Grantham, Bill Gross and Robert Rodriguez, and major cover stories in
Fortune, Harper’s, Vanity Fair, The Economist and The Wall Street

However, at the end of the day, everyone has an agenda:

So who can you trust? Nobody, not me, not even Taleb. Why? In the final analysis the Buddha said it best: “Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense.”

The problem is that if left to the average American, the looting will not finish until well after the end:

Unfortunately, America is losing its capacity to reason, its common
sense, its values, its vision of the future.

Which is why the silent minority is best advised to stock up on popcorn, and watch the cannibalization and the race to the bottom resume at an unprecedented pace, as everything unravels: the best we can do is hope for some amusement as the endgame approaches the finale.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
wafflehead's picture

Tea Party is my party !

pan-the-ist's picture

Tea Party Workers Unite - Bitches!

jomama's picture

glenn beck and sarah palin...? 

Thunder Dome's picture

No, Alex Jones, Bob Chapman and the Info Warriors.

tamboo's picture

jones, beck, palin, rush= pro israel  joo shills.

rand paul too.

Art Vandelay's picture

Take your antisemitic bullshit somewhere else, asshole.

Sparkey's picture

Is it really you George? We've missed you!

Nikki's picture

Art, not all Jews are part of the conspiracy but those involved are almost all Jews. They are the bankers, Fed, govt. Agencies, Scotus, CFR etc... Do some homework. It's not anti-Semitic to expose the kosher nostra anymore that it prejudicial to notice that the mafia has Italians and the Triads have Chinese members... If I say Al quaeda has Muslims, is that also anti-Semitic ?.

I don't really liked the way the poster phrased his spew, but he was right about who is behind the curtain...

caconhma's picture

The fact are quite simple:

  • the WallStreet and the Fed ruling elite are either Jewish and/or controlled by Jews
  • The Congress and the President are the same Jewish puppets
  • They also control the US mass media, Hollywood, and pornography business
  • Jewish neocons brought the Iraq war and the world against the 1B+ Muslim world
  • Just 10 years ago, America was a prosperous superpower. Now, it is a bankrupt and utterly corrupt dying empire.
  • 100 years ago, Jewish Bolsheviks/terrorists/gangsters have destroyed Russia. Now, the USA is their cross-fire for a destruction.
GoldBricker's picture

Be aware than Israel is not equal to Judaism, however much it may attempt to confound the two.

Judaism as a religion existed before it, and will exist after it.

glenlloyd's picture

I'm fiscally conservative but I don't like the thought of that duo.

DaveyJones's picture

I second that. How about we just randomly pick adults out of society for a limited term. We do that to decide to put people to death, kind of an important job and there's a good number of things we need to put to death.

Uncle Remus's picture

Which one is Charlie McCarthy?

Sparkey's picture

Edgar Bergan, Uncle Remus, that is who we should look for, there are lots of Charlies' McCarthy!

downrodeo's picture

Sadly, the tea party is a movement with a lot of magnitude but no direction. It is simply a scalar quantity that can be used to multiply whatever agenda it is applied to. Too bad we can't pull off something like project mayhem.

SheepDog-One's picture

Project Mayhem is already being run by the FED.

Mercury's picture

I think it is pretty widely understood at this point that The Tea Party is an umbrella under which people gather who don't like Obama and what he's doing. It doesn't have to be much more than that to be effective

mtomato2's picture

That is the post pathetic and simple-minded synopsis of the Tea Party phenomenon I think I have ever read.

I don't know you, I don't know who you are...  But if this obtuse observation is any indicator of how you tend to analyze socio-political manifestation, then perhaps it's time to go back to crayons and fingerpaint.

And try not to eat any more paste.  It's bad for the brain.  And yeah.  I'm the first to junk you.

"Widely Understood..."

What a wiener.

aerojet's picture

Methinks the lady doth protest too much.

LowProfile's picture


Or maybe she's just frustrated with everybody who watches what the MSM says about the TP and takes that as gospel, instead of actually *gasp* going to a meeting or a rally and seeing what's actually going on.

IMO they are desperately trying to play up the Palin faction of the TP, while trying equally as hard to ignore the Paul faction.

But WTH do I know, I just hang out and discuss things with actual Tea Party members on occasion.

Mercury's picture

And what "socio-political manifestation" analysis do you think you're demonstrating here Ms. Tomato?

-You disagree that those who organize and are attracted to Tea Party groups and their activities share a common dislike for the Obama Administration's policies and ambitions? What would you identify as their biggest commonality?

-Do you think this is not in fact "widely understood" - that a lot of people show up at Tea Party events hoping to sample fine tea beverages only to find out that they've been duped into anti-Obama political activism?

-Do you think that it is not the case that Tea Party groups realize that by forming an official, separate, national political party they will likely split too many Republican votes and suffer the political fate of Ross Perot - and that is why they have thus far avoided major centralization?

-Are you upset or flummoxed that many disparate groups of political malcontents scattered all across the country can't be all things to all people?

-Do you not think the Tea party will be effective in affecting the outcomes of the 2010 and 2012 elections?

Do enlighten us my dear for clearly this is a serious issue to many ZH readers.

mtomato2's picture

Enlightenment.  No problem.  To simplify the Tea Party movement as "Obama Haters"  is preposterous, simple-minded and insulting.  To only see that as the raison d'etre is to beg for debate.  Junk away, simpletons.

pan-the-ist's picture

Sadly - I think you're exactly right Mercury.

1100-TACTICAL-12's picture

The Tea -Party is drifting abit right now, but it will evenually hone in on it's course.

Cognitive Dissonance's picture

Which is what course? Where do you think this political impulse is headed and do you think it will be subverted by the mainstream parties?

BTW, should I assume that Tea Party members understand that the powers that be might be directing the various foreign and domestic intelligence agencies under their control (read all of them) to work against a third party in America?

1100-TACTICAL-12's picture

Course unknown, What I'm saying I do believe the Tea Party is rudderless & waiting & willing to accept the truth & a leader who speaks the unpolished truth. Yes I do believe they for the most part know they are under attack, to be co-opted, manipulated. I have been to one rally here in Texas, just to check it out, did not seem to be a bunch of fanatical rednecks. I believe they know the system is broke, I don't think they have the solution, but they are learning,listening,watching knowing buisneess as usual only spells the demise of life as we know it..

Commander Cody's picture

Find the truthsayers, find the leaders.

TJ_is_annoyed's picture

The current course that has been charted by both parties is full speed into an iceberg the size of Texas.  So the Tea Party course can't be any worse (can it?), and by default will probably be better.


Any new political party that would gain power *must* enforce term limits.

Hopefully I'm preaching to the choir here:

"A government big enough to give you everything you want, is strong enough to take everything you have."  

"Experience hath shown, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny."

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."

"My reading of history convinces me that most bad government results from too much government."

"The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government."

"I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt…If we can prevent the government from wasting the labors of the people, under the pretense of caring for them, they will be happy."

-- Thomas Jefferson


When the people find they can vote themselves money, that will herald the end of the republic.

-- Benjamin Franklin

The founders understood corrupt governments all too well.

Well, at least the experiment worked for a few decades anyway.

Milestones's picture

"The more numerous the laws, the more corrupt the State" Tacitius (sp). This country is drowning in it's own spit.   Milestones 

RockyRacoon's picture

CD, we have not seen unrest here because TPTB have not done anything yet.

Wait until they actually curb free food, retirement benefits, or Medicare:

PARIS (Reuters) - French families, students and private sector workers joined mass demonstrations on Saturday as trade unions ramped up pressure on the government to drop pension reforms.

Opposition to President Nicolas Sarkozy's plan to raise the retirement age to 62 from 60 showed no signs of abating and hundreds of thousands across the country marched in the fourth round of rallies in as many months

Unions said that about 2.9 million had marched, while police said the crowds numbered 899,000. The union figure was about the same as at the last demonstrations on September 23. The police figure was slightly lower.

A survey published by French daily newspaper L'Humanite showed more than 70 percent of people backed the day of action.

"We won't back down," said Bernard Thibault, head of the powerful CGT union. "If the government won't listen there will be further action."

caconhma's picture

 French daily newspaper L'Humanite is an old mouthpiece of their communist party.

midtowng's picture

That course being to elect more Republicans. As if that will fix anything.

Tearsinrain's picture

You might ask Castle and Murkowski how that is working out for them. The Republicans are simply second tier and they will be gotten out in time if the TP can hold focus. It isn't just about 2010, but '12, '14, and further.

baserunr's picture

Electing more Republicans won't fix a thing.  Electing more conservatives that follow the Constitution, cut the Federal Government back to its useful and intended size, and want to eliminate the FED; that will get you somewhere.  At least, its a start.

masterinchancery's picture

The Tea Party is all Americans who work at real jobs(NOT jobs looting the country) and save their money.  They are the lootees, and their motivation is survival.

sgt_doom's picture

Mercury, you are of course right, but it is more definitive than that description.

The Tea Party is truly representative of the classic Ameritard, easily persuaded, completely dense and morally bereft.

Why?  Because they play the stooges, demanding ever more tax cuts for the super-rich who actively pay little, or absolutely no, taxes!

What could possibly be more idiotic?

The Koch Bros. and Peter G. Peterson, who have long funded such trivial nonsense, live to pay nothing to the feds, while having the rest of us pay everything!

tmosley's picture

Tea Parties regularly boo big-government "conservatives".  If the "leaders" stray from the principles of the movement, they will be crucified.

They are directionless like a stirring giant is directionless.  All it takes is one more prod, and he may awaken, enraged.

A Nanny Moose's picture

The concept is widely known as herding cats. Nothing wrong with allowing people to fly their freak flags, so long as they do no harm.

Cognitive Dissonance's picture

You sum up nicely the art of psyops. Let people feel their being radical or revolutionary without actually showing up at the Washington Mall to protest. After all, to do so costs money and I'd need to drive and where would I stay and my hemorrhoids are acting up.

Let the air out slowly. Don't try to stop it, just slowly dissipateit. A little in fighting also helps to work off the animal spirits so let's seed the crowd with some so-called anarchists and other various disruptor's.


BobPaulson's picture

Yes. The religious wing of the Republican party has been outed as destructive to the GOP supremacy. My guess is they are the primary means of undermining the TP and getting it labelled as a repository for nutjobs. Throw in some vocal racists and TP credibility is toast. 

SRV - ES339's picture

The TP is funded by those responsible for the sad state of the world financial system (as usual, follow the money). They simply want to divide and conquer (never gets old) to secure yet more power... ensuring continual loophole legislation designed to scim Trillions (more) from the peasants.

You are being had my friend, and are a very big part of the problem.

aerojet's picture

You got junked, but it only emphasizes the denial.  I have no doubts about the intentions of certain Tea Party people--they truly desire reform.  However, they appear to be naive regarding how the machine works.  You only need to witness how quickly it consumed Obama to realize that there is no solution from within government anymore. 

Edmon Plume's picture

All other points being sound, IMHO, you speak as one who has experience being naive when you state that the machine consumed obama.

Ripped Chunk's picture

The machine is Obama, for now.  Can't wait to see the next puppet.

Aghast in Midlothian's picture

My wife and I have been to tea party rallies along with all the other well-educated, well behaved professionals in Richmond...our part of the trillions must be in the mail.