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MarketWatch columnist Paul Farrell cites gold market rigging
Big Banks Conspiracy is Destroying America
By Paul B. Farrell
MarketWatch.com, New York
Wednesday, August 7, 2013
http://www.marketwatch.com/story/big-banks-conspiracy-is-destroying-amer...
Imagine 100 Goldman Sachs banks running America and the world. It's happening. Forget politicians. Big banks rule the world.
It was just a few years ago in "The Great American Bubble Machine," a Rolling Stone feature, that Goldman was indicted by Matt Taibbi: "The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
Yes, until recently Goldman Sachs was boss, everywhere, the "world's most powerful bank." Taibbi: "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression." What an indictment.
... Dispatch continues below ...
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Today every bank in the world is a Goldman wannabe. That's capitalism at its peak. All competing to be the world's most powerful bank. Seriously, look around: Your world really is dominated by this amazing new innovation emerging from capitalism — a bizarre conspiracy of big banks, maybe a hundred Goldman wannabes. These new big bank capitalists are rewriting the history of the world.
But we're getting ahead of the story. Let's review Goldman Sachs' role in creating this new Big Banks Conspiracy.
In "The Great Bubble Machine," Taibbi says Goldman was the mastermind behind every great bubble in American history since it was founded in 1869 by Marcus Goldman and his son-in-law Samuel Sachs. Yes, one bank gets blamed for America's amazing history: Bubble 1: the Great Depression. 2: tech stocks. 3: the housing craze. 4: $4 a gallon gas. 5: rigging the bailout ... and now Bubble 6: Global Warming.
Example: Early on in this indictment, Taibbi focused on a chapter in John Kenneth Galbraith's classic "The Great Crash, 1929," titled "In Goldman Sachs We Trust" where the Harvard economist singles out Goldman's "Blue Ridge and Shenandoah trusts as classic examples of the insanity of leverage-based investment. The trusts, he wrote, were a major cause of the market's historic crash; in today's dollars, the losses the bank suffered totaled $475 billion."
That's almost a half trillion in today's dollars, prompting Galbraith to add: "It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. ... If there must be madness, something may be said for having it on a heroic scale."
That's Goldman Sachs key to success, crazy like a big fox, a mad money machine, an awesome Bubble Machine, making history, dominating the world from America.
Yes, Goldman Sachs's reputation for over a century has been grown with this "madness on a heroic scale," winning big because of its "gargantuan insanity," constantly pushing the boundaries of ethics, integrity, and morality while year after year since 1869 this "great vampire squid" keeps winning big.
So Goldman Sachs is the gold standard against which all other banks must compete, the front-runner in profits and wealth creation, the role model that defined the moral code necessary for competing in today's financial world.
Goldman possesses a certain bold madness and borderline ethical behavior that today has not only been adopted by all its competitors on Wall Street but has also become the moral code running the collective brain of capitalists everywhere, corporate CEOs and Washington politicians.
And today it is being rapidly adopted by business and political leaders across the developed world, wannabes all competing, fighting to be the next Goldman Sachs.
All Big Banks now competing to be next Goldman Bubble Machine
Get it? Every bank in the world is now a Goldman wannabe. A subtle conspiracy. That's globalization and capitalism at its best, all competing for a piece of the action, for the top spot formerly held by Goldman Sachs. Yes, a few short years ago Goldman Sachs was "the world's most powerful investment bank."
Today's world includes four Wall Street banks each with assets over $1 trillion, each more than Goldman. Plus eight other big global banks each have over $2 trillion total assets, including, among the 100 largest, Barclays, HSBC, Deutsche, ICB-China, and Japan's Mitsubishi.
Yes, this new world is changing fast. Back in 2008 the world's financial banks were in ruins. Wall Street sunk into virtually bankruptcy. Goldman and its Wall Street too-big-to-fail co-conspirators had trashed the global economy, triggered a virtual depression, and Wall Street's casinos lost over $10 trillion of Main Street retirement funds.
But thanks to their Trojan Horse in Washington, Treasury Secretary Hank Paulson, a former Goldman Sachs CEO, the banks were able to deceive, con and manipulate Congress into bailing out not only Paulson's old firm, but all his buddies in the Wall Street banking community, by giving away over $30 trillion of free cheap money, to be paid for by future generations of taxpayers, investors and a high-unemployment, weak recovery.
Yes, the Goldman Bubble Machine phenomenon turned into a rapidly spreading virus after 2008, infecting all banks worldwide. How? Pure capitalism, competition grounded in basic human psychology, behavioral economics, and neuroscience research.
As we wrote recently, this "moral bankruptcy" virus was hard-wired in the collective brain of all the world's bankers -- a virus that began a long time ago in the Goldman Bubble Machine and now, since the banking industry's 2008 near-death experience, has morphed into the new Big Banks Conspiracy that's taken over the world.
Mass corruption is now the "new normal" for global Big Banks
Don't believe me? Any doubts about the world domination trend driving the Big Banks Conspiracy, then go to "The Big Picture," one of the world's leading financial blogs run by Barry Ritholtz, author of "Bailout Nation." Last week he posted a powerful "Washington's Blog" on the "Manipulation" that's is a pandemic of corruption across America and the global banking world. That analysis of "Manipulation" is brilliant. Here's a summary:
But before you read: You must mentally translate all references to "manipulation" into what they really mean, phrases like: corruption, scam, con job, gaming, cheat, fraud, price-fixing. Why? Because that is the real meaning: Wall Street and the world's Big Banks are not merely engaged in "manipulations" common in commercial transactions.
The banking industry is engaged in a subtle conspiracy of unethical, immoral, dishonest, corrupt, illegal, and outright criminal behavior, for profits ... cheating investors and taxpayers, conning the government, buying off politicians and setting America up for a massive crash, bigger than 2000 and 2008 combined. Their rationale? That's the logical next phase for capitalism!
Far worse, this dark behavior has already metastasized far beyond the pre-2008 actions of the Goldman Sachs Bubble Machine. Today this behavior is everywhere. "Everything is rigged." This corrupt behavior is so pervasive among banks, even the American people seem to accept it as part of our economic "new normal."
Yes, this behavior is so common not only do bankers believe it is essential to compete in today's capitalist world, their clients in Corporate America and throughout the global business world accept it.
Today "big banks manipulate every market they touch ... huge government subsidies were used for speculation ... throwing money at banks doesn't help the economy." In fact, despite his delusion of saving the world economy, Fed Chairman Ben Bernanke's policies were "a major source of the crisis." To stabilize the economy we need to "break up the banks," but unfortunately "the big banks own D.C. politicians."
The Washington's Blog on "The Big Picture" is the must-read of 2013. exposing how Wall Street and the banking world are taking over America. Read some of their more than 50 links to all the toxic examples of the banking conspiracy driving our world to the third market crash of the 21st century, a collapse of the economy and the Great Depression II.
Beyond the tens of millions of overcharges in energy markets, Wall Street's "Big Banks have manipulated virtually every other market as well -- both in the financial sector and the real economy -- and broken virtually every law on the books." Yes, they're corrupt.
Here are more examples of the Big Banks Conspiracy's illegal manipulations: They "have been conspiring for decades to manipulate commodity prices" with a wholesale "takeover of the real economy as well as the financial system." Their conspiracy includes widespread insider trading ... rigging Libor interest rates for $800 trillion in assets, which still hasn't stopped ... price-fixing the $1,200 trillion derivatives market ... currency markets are "massively rigged" ... gold, silver and oil prices are illegally fixed ... Today virtually "everything can be manipulated through high-frequency trading ... stocks, bonds, options, currencies, and commodities."
The 50-plus examples of the Big Banks Conspiracy also includes: Price-fixing of billions in fraud against local governments and pension funds ... bogus fees to store gold bullion, without ever owning gold ... frauds in mortgage origination fees ... cheating homeowners in foreclosures ... charging unlawful mortgage fees ... pushing bad investment deals "then betting against the same investments." ... illegal front-running and "wash trades" ... "participating in various Ponzi schemes" ... "cooking their books" ... and "bribing and bullying rating agencies to inflate ratings on their risky investments."
Bottom line: Goldman Sachs has become just another second-stringer in the new global Big Banks Conspiracy as capitalism appears about to self-destruct Adam Smith's ideal and trigger the third major market crash of the 21st century, followed by a collapse of the economy, driving America and the world deep into a new Great Depression. Be prepared.
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Paul Farrell writes the column on behavioral economics for MarketWatch. He's the author of nine books on personal finance, economics, and psychology, including "The Millionaire Code," "The Winning Portfolio," and "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a juris doctor degree and a doctorate in psychology.
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