There have been recent news reports about the $5 billon dollar fine levied by the Justice Department on Goldman Sachs for deliberately misleading mortgage bond investors during the period leading up to the 2008 housing bubble crash.
We are supposed to be impressed by this but I have long been cynical about these fines because for these banks it is clearly seen by them just as part of routine the cost of running their business, like paying the electricity bill. These highly publicized fines seem to be part of some kind of understanding arrived at between the banks and the Justice Department to avoid admitting criminality and real punishment.
After all, if investors had been deliberately misled, it was not because of an act of god like a hurricane or an earthquake. There had to have been people who were doing the deliberate misleading. Who are they and why have none of them, not a single one, been sent to jail for it, especially when petty frauds involving many fewer victims and much less money are punished so harshly?
Seth Meyers exposes this scam of paying fines and avoiding admitting to doing anything wrong.
Goldman Sachs has agreed to steal another $5billion and turn the loot over to the government.
It’s a tax on getting caught, basically.
The exact same type of “settlement” left Rick Scott with the freedom and money to buy the governorship of Florida. Stockholders, not execs, will take the hit.
The G-S deal involves more money, but (directly, anyhow) fewer deaths.
“There had to have been people who were doing the deliberate misleading. Who are they and why have none of them, not a single one, been sent to jail for it,”
The same reason that those in governmental positions aren’t being prosecuted for violating their oath to the Constitution. They are in bed together protecting and benefiting one another..
The bankster fraud began many centuries ago and has been played out on many nations. Some more recent and notable fraudulent landmarks include the creation of the Federal Reserve System which allowed for the creation of debt based money fractionalized and issued on the basis of 60 dollars credit for every 40 dollars gold held in deposit. This ultimately allowed the elite banksters to either hoard the gold or sell on the London exchange leaving the American people with the remaining circulating credit resulting in the economic crisis of 1929.
Rather than correct the underlying problem by abolishing the Fed and returning to the Constitutional monetary standards, the U.S. government subjected the American people to 4 years of economic austerity and poverty before finally checkmating the domestic constitutional monetary system by unlawfully bypassing the constitutional obligation with respect to all domestic transactions. Known as the New Deal, socialist monetary policies were implemented thereby precluding all American’s from (1) their right to receive payment at law, and (2) exercising their right to make payment at law. These New Deal policies have unlawfully converted all Americans into debtors in a state of perpetual debt slavery. See the 5th plank to the Communist Manifesto.
Many more details are available to any honest researcher as to how this nation is being destroyed by the monetary fraud of debt slavery.
Going down this Communist road doesn’t seem to bother most Americans in spite of the fact that even president Putin has admitted that the end of all socialist states is ultimate failure.
The fact is most Americans are unable to even intelligently question the political state in which we live. Very sad! This is why we hear such an idiotic clamor to “Feel the Bern”.
The repuklicans are no better. Two wings on the same collectivist bird of prey.
The ongoing scam by the banks and the DOJ is merely the icing on their cake.
The entire discussion is based on the false premise that the government regulates the banks, not the other way around.
Welcome to the worship of money. A simple quasi-religion with but one virtue, one sin, one heresy:
Virtue -- Having more money.
Sin -- Having less money
Heresy -- Leaving money on the table.
In this bankers, investors, financiers are all high priests of the faith. Prosecuting them is persecuting them for their faith.
Switching to the gold standard will lead to more volatility, not less. If everyone moves to the gold standard the world-wide aggregate limit to all growth will be restrained by the expansion in gold production. Issues at just a handful of gold mines could easily cause a global recession. But the instability and limits don’t stop there. Gold is simply not any more stable or reliable than any other commodity.
The main billionaires pushing for the gold standard through think tanks and policy institutes are heavily invested in gold. Nothing surprising about that. Kind of like finding out that the people seeking to limit the use of electric cars are heavily invested in oil. Gold is just another commodity that can be talked up, or down, or otherwise manipulated on the markets. Gold and hog bellies same-same.
Any time a nation balances their budget and eschews deficit spending they go into recession. National deficits for sovereign nations can be high or low, but when they disappear, you are in trouble. You can’t run a sovereign nation’s finances like you run a household budget. Deficit spending is hazardous for a household but it is mandatory for the health of a nation. Remember that debt, the willingness of people to lend money, is the single largest measure of confidence among nations. People of other nations want us to hold their money, and to do so at effectively negative interest rates. They are literally paying us to hold their money.
Lorn, I was not trying to suggest that we return to the days of the gold and silver standard. There were inherent problems with the gold and silver standard. Primarily the acceptance by the people of the ability and right of the government to declare those two commodities alone as ‘legal tender’ per the constitutional requirement set the stage for economic volatility. The same had occurred many times before in history.
Yet in this state of volatility many social agendas were somewhat limited. These limitations also precluded the banks from loaning credit and thereby establishing a perpetual economic state of debt slavery.
The problem results from the superstition that governments should hold the authority to determine and fix, declare by fiat, what circulates as money. It is understandable that the people of three centuries ago would have accepted this in light of the only history they had known. Even today it is easy to understand why most people do not think outside the box with regard to circulating mediums of exchange. Crypto-currencies are one example of moving in another direction.
The market should decide what constitutes a proper medium and not the government or King. In my opinion, a basket of commodities which by their very nature are representative of actual production should serve as backing for any circulating notes of exchange. These notes could be and would be redeemable upon demand if such were desired. When notes were redeemed and possession of whatsoever commodity was taken those notes would be destroyed. New money could no longer come into circulation unless based upon actual production as opposed to future production. No longer would the circulating medium represent a mortgage backed by the people’s private homes and other property as occurred under the Banking Relief Act of 1933.
No matter. Any “basket of commodities”, or any material goods, will face the same set of problems. There are no special commodities, or mix of commodities, that will avoid the problem. That said, while all are inherently weak and vulnerable, some are better than others. Much the same way that even a well diversified portfolio is still vulnerable to major market failures even as it will tend to, on average, be more stable.
A well diversified mix will ride the waves more smoothly. But if it hits the rocks it still sinks.
As long as anything physical is used as a medium of exchange there will always be increased volatility as the two cycles, notional exchange medium and commodity, interact creatively and destructively eliminating stresses which should be transmitted and magnifying stresses which are best left to run their course.
This can be seen with housing as houses, purpose build machines for living and shelter, are also used as tokens for exchange. In the first case the value is a measure of the utile nature of the house and its location. In the later there is no intention of ever using the house to live in and it is the embodiment of exchange. This works to the detriment of both systems as market irrationality cyclically starves and floods the market with houses previously used purely as investments and the cyclical needs for actual places to live converts natural population growth and migration cycles into financial calamities.
Straddling he divide between notional instrument of exchange and practical real-world, utility distorts both markets and leads to unnecessary volatility.
Lorn writes, “No matter. Any “basket of commodities”, or any material goods, will face the same set of problems. There are no special commodities, or mix of commodities, that will avoid the problem.”
Not at all sure what you are referring to by “set of problems” and “the problem” you mention. The problem I was referring to was the governmental legal tender standard set in the Constitution. Could you please clarify?
Also, What are you referring to when you mention “notional exchange medium”?
“notional exchange medium” = Money. Specifically the need for the exchange medium to be independent of any specific material commodity or external reference. The only way money can work smoothly is to allow sovereign nations to create and destroy it, at will and as needed, to serve the interests of their economy. In essence the only thing money should be linked to is the measure of the world’s confidence in a particular nation as expressed in the exchange rate. To link it to any other value causes distortions in both the money side, and that which it is linked to.
As for the constitutional side, I don’t really care. Half the problems we are facing are a byproduct of this nation existing in the 21st century but being saddled with a founding document written in the 18th century, when individual liberties, nation founded without reference to God, and both individual and collective rights were a new concept. Then there are the issues of new technology. From weapons that would have shocked the consciences of our founding fathers, telecommunications and transmission of information, floating valuations, and ownership of property that has no physical presence; they wouldn’t have any idea of where to start.
We are so far beyond the original framers conceptions that the original intent is meaningful only as a reference to their desire to create a nation that functioned. There is nothing special about the US constitution. Those few things that were special in its day are now eclipsed by the founding documents of more enlightened nations. As one of the, possibly the, oldest founding document it is pretty much a century out of date. It hearkens back to days when people were born into slavery, women were essentially chattel under the control of father or husband, and corporations didn’t exist.