Posts Tagged ‘Matt Taibbi’

It Is The Monetary System…

June 5, 2013

Matt Taibbi and PIMCO’s Bill Gross dance around the conclusion from different perspectives.

In “Why Didn’t The SEC Catch Madoff? It Might Have Been Policy Not To” Matt Taibbi highlights the aberrant succession of events that was allowed to happen despite the warnings from industry insiders and the sheer amount of operational red flags Madoff had raised.

In “Wounded Heart” Bill Gross reflects on the sheer aberration of Fed’s actions and finds that it is actually part of the problem rather than the solution.

Other luminaries of finance have also danced around the issue.

The truth is of course, that once this particular monetary system is imposed, there can be no other outcome than what is being noticed by Msrs. Taibbi and Gross.

As an entity successfully imposes by coercion on society one particular variety of money and, simultaneously replaces the notion of capital with debt, the outcome is dialed in. In time, not only does profit gradually drain from society to concentrate in the finance industry but savings are depleted as government must arithmetically become the largest actor in the economy. This dynamic is driven by the diminishing marginal efficiency of debt which devalues the currency. As the currency loses traction, government must necessarily intervene in the economy at ever greater and deeper degrees to compensate the loss of traction.

On the road to becoming the largest actor in the economy, government has a vested interest in initially tolerating certain illicit behavior. But as the efficiency of debt is eroded further, government needs to progressively disregard egregious behavior till it must necessarily solicit it and, finally, collaborate in criminal behavior (i.e. MFGlobal and Cyprus).

It is all a direct ramification of allowing this particular monetary system to be imposed. A monetary system that was never voted upon or that was otherwise never submitted to the people to accept or reject.

Considerations On The Prosecution Of Fraud

December 17, 2012

Matt Taibbi put out a blog post on the most recent legal farce regarding the case of HSBC caught red handed (and admitting) laundering billions (9 zeros) of Dollars in drug money. The post is well worth reading if for no other reason that it is a piece of sober and factual journalism like no longer exists in the main stream press.

I have no quibble with the post and Mr. Taibbi’s articles and posts are usually well researched and factual.

As always and perhaps misguidedly, my personal effort is devoted to making people see that there is a logic behind what is by now blatant corporatism. This settlement like any number of other episodes of deviant and criminal behavior perpetrated at all levels of society (but particularly by the banks) and subject to arbitrary degrees of punishment are the inevitable consequence of the original premises upon which Western politicians chose to build society.

Everything begins and ends with money.

Money is by far the single most misunderstood construct in the universe. “Money” is just a noun. Anything can be money. If it can be exchanged, it could be money. Stones could be and are money on Yap island. Salt is money. Cigarettes are money. Children trading soccer cards in the school yard are exchanging money. Hippies living in communes and exchanging cabbages against cardigans have deemed that their money is represented by items and objects of utility realized by the effort of man; this is a key concept.

Money is but a noun. Anything can be money that is suitable for exchange between sentient beings.

Money is inextricably tied to who we are, what we think and what we do. Money represents our skills and our effort. If we have no ideas and no skills, few if anyone would want to interact with us. Money is us because we are the sole rightful owners of our ideas and skills. When luminaries such as Thomas Jefferson speak of the nature of money as the ultimate arbiter of the liberty of man that is what he meant.

Ultimate liberty would be the freedom to choose what we deem suitable as trading vehicle for our ideas and skills.

The minute you allow one entity to decide what money is and you further empower this entity to create this money at will, you have lost your liberty because you have lost the ability to uphold the value you deem is suitable for your ideas and skills. Suddenly, it is the monetary authority that dictates the value of your ideas and skills and by debasing money the monetary authority debases your skills and your effort, keeping you on a treadmill.

Money should be the inalienable right of every single human being to choose.

By taking away this right, the entity that is privileged with imposing the monetary system is placed at an immediate and asymmetrical material advantage over everyone else AND will arithmetically and gradually acquire the entire productive wealth of society, in the process rendering society destitute and fully dependent.

The logic of fiat money and Fractional Reserve Banking (FRB) dictates that great amounts of debt must be created. In order to do that, government, corporations and individuals must be compelled to spend liberally and without limit. Overspending is encouraged by expedient politics (welfare/warfare state), by progressively debasing the currency and by lowering interest rates.

The above is what inflation is all about.

But inflation is a dynamic that conforms to the law of diminishing marginal utility so that greater degrees of inflation are gradually required in order to obtain the same result.

The logic of FRB therefore cannot contemplate a contraction of the credit markets. This means that as the system threatens to collapse as it arithmetically would, the monetary authority must intervene at progressively greater and deeper degrees in the economy in order to postpone the implosion of the system. Postponing the inevitable is achieved through an expansion of government at home, through the creation of entities such as the UN, the IMF or the World Bank whose primary role is to promote debt gargantuan spending and through the assimilation of the markets and currencies of other sovereigns (Floating Exchange Rates). In this monetary context too, high level criminal fraud must initially be tolerated, then gradually encouraged till eventually,  as monetary policy loses traction, the state must deliberately carry out criminal enterprise. Fast And Furious is a case in point but TARP, the climate change boondoggle or the MFGlobal bankruptcy are good examples too.

So too is the “punishment” for HSBC which is the clearest and latest proof that the state is complicit in criminal behavior.

Since we are talking about HSBC and drug money laundering, here is something else worth considering.

The “war” on drugs.

David Malone, one of the bloggers I follow regularly, has a blog post about the reality of the drug trade. Essentially, David convincingly argues that since the drug trade is a reality, banks are an inherent, essential and inevitable cog of the trade. This qualifies as an open secret or, if you prefer, an inconvenient truth. Where there are billions to be moved and legitimized, you must not only have banks to assist you along the way but, in light of the sheer size of the transactions taking place, said banks can only be major banks.

But beyond the legitimization of drug money, we also know that historically the drug trade is not only a fantastic revenue generating business for government but it is also a very effective tool to subvert nations and then justify gargantuan spending at home to provide ostensible “security” for the people. The Opium Wars come to mind of course but more recently we also know that since we invaded Afghanistan to, amongst other things, putatively thwart the opium trade, opium production has increased many fold. We know that because the UN tells us it has.


I began participating on discussion boards in 2002 and my first tentative contributions were made on The Motley Fool boards. At the time I felt something was not right but could not quite identify what and why. As I began to delve into the dynamics of money, a number of things began to come into focus. By 2005 I was already blogging, in a manner of speaking, on Facebook and already then I was able to project that we would witness progressively greater scandals coming to light in sequentially higher offices of Western governments.

What is happening today is not and should not be a surprise. After all, there is no shortage of historical precedents.

For a compendium of only the most recent criminal behavior see George Washington’s post:

As I opined already many years ago, this shell go on till mobs of destitute, homeless, hungry and angry people will be roaming the streets in search of bankers and politicians to lynch. At that point, our leaders will precipitate a war in some far away land and each (Western) nation will be rallied around the flag to fight a just war for our freedom and our way of life… such as it is…