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
Journal.

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.