Most people have been trained to internalize only those ideas that come from honchos, that is, political and religious big shots, “experts,” very rich people, celebrities, etc. The powermongers capitalize on this when faced with criticism of the system by often resorting to what the logicians call ad hominem attacks, that is, they deflect attention from the criticism by attacking the person delivering it, attempting to undermine that person’s credibility. They characterize the malcontents as crazy, unpatriotic, uninformed, uneducated, or as crackpots, charlatans, imbeciles, demons, and so forth, while never addressing the issue at hand.
So for a more general public understanding of the nature of our system, it helps when people considered to be honchos start publicly discussing what is in fact going on. Other honchos are less likely to try to pull the ad hominem attack on one of their own. In other words, truth about the nature of our system needs to emerge from the blogosphere and into the mainstream. This process is accelerating.
Below is a link to an amazing video showing Columbia Professor Jeffrey Sachs speaking to a conference organized by the US Federal Reserve:
He begins by reporting that he was just at a meeting with foreign ambassadors at the UN who were asking:
“Why are we taking advice from the people who have managed the financial system so badly?”
He goes on to say that while people expect economists to talk about statistics and monetary issues, that the real problem with the system is as follows:
We have a mountain of criminal and fraudulent behavior…The amount of utter criminality and financial fraud is absolutely enormous…This is what’s called the American financial system at the moment. It’s an unregulated essentially lawless environment…
This is a profound failure of government…
I regard the moral environment as pathological…
We have a corrupt politics to the core. Both parties are up to their necks in this. It really doesn’t have anything to do with right wing or left wing. The corruption, as far as I can see, is everywhere.
Sachs follows that by saying that he meets with the top Wall St CEOs on a regular basis and the common feature he observes is that these people believe they can do anything they want, legal or not, with impunity. And that given their takeover of the politicians and regulators, they are correct!
Now this isn’t coming from MIT’s Prof. Noam Chomsky–who, let’s face it, was decades ahead of all of us in pointing out the criminality of the corporate/political system–it’s coming from a highly respected Columbia professor.
For a few years now, the money printing central banks such as the US Federal Reserve (the central banks have directly printed at least $16 trillion and counting) have been told by bloggers that this money is not supporting jobs and the economy, but rather that it is going to the rich who are bidding for financial assets and causing bubbles in multiple asset markets including stocks, bonds, and real estate. People like Ben Bernanke, his henchman, and academic and Wall St economists have denied this.
But now we find out, from a Freedom of Information Request by Bloomberg and from a leaked Fed document, that the banking insiders who advise the Fed are finally saying the same thing that the continuously-discredited bloggers have been saying all along: that the money printing is creating bubbles in farmland prices and student loans, and:
There is also concern about “an unsustainable bubble in equity and fixed-income markets given current prices.”
And for years, bloggers have said that the central banks cannot possibly stop printing more and more money or the whole edifice will crumble, another charge that is roundly derided. The Fed has claimed repeatedly that it has the tools to undo all the money printing so that it will never cause a problem. But now their own banker advisory panel says that if the Fed stops printing, it “may be painful for consumers and businesses…” and that “the Fed may now be perceived as integral to the housing finance system.” In other words, if the Fed stops printing, the “housing finance system” will collapse. Which it would. In a heartbeat.
We would stress that we fully understand why the authorities wouldn’t want free markets to operate today as the risk of a huge global default and unemployment cycle would still be very high.
And a recent member of the Federal Reserve Board, Kevin Warsh, said that their money printing is not working and they are losing credibility:
…over the last several years, [the Fed] has over-promised and under-delivered, and the bank’s most important asset – credibility – is under attack.
One would think that, if their strategy isn’t working, that they have other tools they can bring to bear. That’s what they tell us. But Warsh says, “There is no Plan B.”
Bloggers have been warning that European banks are insolvent and getting worse all the time. Now the European Central Bank itself admits that the “euro zone’s slumping economy and a surge in problem loans were raising the risk of a renewed banking crisis.”
Here is an interview with the President of the Chicago Mercantile Exchange, that place where they trade paper and electronic instruments that have an increasingly tenuous connection with physical things like gold, silver, copper, oil, etc. From the interview:
What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products (ed: futures) trade down significantly, but one thing that did not trade down, was gold coins, tangible real gold. That’s going to show you, people don’t want certificates, they don’t want anything else. They want the real product.
Then there is the supposed eternal juggernaut of the Chinese economy that will keep all the other floundering countries afloat. Much of that juggernaut has been propelled by debts taken on by local governments to promote the economy in their areas. But now the Financial Times reports this:
A senior Chinese auditor has warned that local government debt is “out of control” and could spark a bigger financial crisis than the US housing market crash.
Zhang Ke said his accounting firm, ShineWing, had all but stopped signing off on bond sales by local governments as a result of his concerns.
Last but not least, an insider is finally speaking up about nuclear power plants in the NY Times:
All 104 nuclear power reactors now in operation in the United States have a safety problem that cannot be fixed and they should be replaced with newer technology, the former chairman of the Nuclear Regulatory Commission said on Monday…
The position of the former chairman, Gregory B. Jaczko, is not unusual in that various anti-nuclear groups take the same stance. But it is highly unusual for a former head of the nuclear commission to so bluntly criticize an industry whose safety he was previously in charge of ensuring.
This system is coming apart at the seams. Insiders and whistlebowers are finally describing the details. The US Government realizes this and is desperately trying to keep whistleblowers from telling the truth by filing charges against them and trying to ruin their lives. Ultimately, it won’t work. I just hope that everyone reading here takes those actions they need to take. By the time the collapse is on the television Nightly News and Page 1 of the newspapers, with the system honchos all claiming “No one could have seen this coming,” it will be too late.