Corruption Cuts Confidence

THE POSTER BOY FOR GOVERNMENTAL CORRUPTION: Jon Corzine, Governor and former Senator from New Jersey.(Photo credit: Wikipedia)

Anyone who studies economics understands that the strength and stability of an entire economy rests primarily on public confidence.

Franklin Delano Roosevelt said, “We have nothing to fear, but fear itself.”  In other words, we might have the world’s greatest natural resources, its most industrious people, and the most modern technologies.  But, if the public loses “confidence” in the economy or the political system, and becomes fearful, the economy can crash into a depression.

The reason is simple.  When people are confident that their futures are bright, they’re optimistic and spend freely; they invest and take risks and the economy runs hot and fast.

But when the people lose confidence in their futures, they become pessimistic and fearful, and they tend to save rather than spend or invest.  If the public won’t spend, the economy slows, unemployment rises and depression beckons.

“Confidence” is to the economy what “morale” is to the military.  So long as people are confident, they can overcome almost any obstacle.  When they lose their confidence, they can be stopped by any small bump in the road.

Therefore, it’s critical that government maintain public confidence—even if that confidence is based on lies.  We see evidence of government’s willingness to lie in economic indicators (unemployment rate, size of the national debt, price of gold, etc.) that are manipulated and “massaged” in order to create a false confidence in the economy.

The people must believe in government’s honesty, so once government starts to rely on lies to shore up public confidence, government can’t ever admit they previously lied to the people. One lie leads to another, and then another.

Result?  Insofar as our economy depends on public confidence—that confidence is increasingly based on lies.  But as those lies accumulate, they are inevitably exposed and rejected–but public confidence will falter and the economy may collapse.

An economic depression isn’t merely a time when unpayable debt is flushed out of the economy.  It’s also a time when a society admits and rejects its untenable lies.

Here’s a list of some of the current lies on which our economy depends and which are headed for the “ash heap of history”:

 

LIE #1:  The US Economy is Strong and in Recovery

Really?  Does anyone really believe that crapola?  That lie’s been told so many times and become so laughable that even Obama hates to tell it.

 

LIE #2:  Banks and Financial Institutions are Honest

•  Oh, pulleese.  “Fraudclosure” describes a nation-wide phenomenon whereby small banks have routinely defrauded mortgagors.  If banks were fundamentally honest, “fraudclosure” could not have happened except in a few isolated venues.  The fact that “fraudclosure” occurred nationally is evidence of a widespread predisposition to defraud the people at even small banks.

• Bailouts for banks “too big to fail” were in some regards bailouts for those banks “too connected to fail”.  Big banks took tremendous (even absurd) risks, and if the risks paid off, the banks kept the profits.  If the risks failed, the losses were passed on to taxpayers.

Of $16 trillion in “stimulus” money surreptitiously distributed by the Federal Reserve, much of that stimulus went to people sitting on the boards of governors at each of the Federal Reserve banks.  The Fed bailed out its governor’s rather than taxpayers.

•  The “Poster Boy” for American financial corruption is Jon Corzine—the former governor, former senator, former financier.

During Corzine’s tenure as CEO for MF Global, $1.6 billion in segregated customer accounts “disappeared”.  Corzine claims the $1.6 billion simply got “lost” somehow.  He claims to be mystified by the loss.

But, how can a financial institution (which presumably keeps track of its currency down to the penny) “lose” over a billion dollars?  How can the Department of Justice fail to prosecute on behalf of the investors who lost the $1.6 billion?  Why have Congress and Obama failed to cause prosecution for the “lost” funds?

NEWSER offers an answer:

 

“If there’s one issue that seems to unite people of all political persuasions, it’s ‘the Justice Department’s unwillingness or inability to charge, prosecute, and seek conviction of a single Wall Street executive in the wake of the largest financial collapse in US history,’ writes Peter Schweizer of the Washington Times. And nobody embodies the cronyism that has prevented such prosecutions quite like Jon Corzine. Attorney General Eric Holder still hasn’t named a special prosecutor to investigate the former MF Global CEO, despite prodding from 65 members of Congress.

“Corzine was once a client of Holder’s law firm, and he raised $500,000 for President Obama’s campaign. MF Global’s bankruptcy trustee and counsel each have connections to the Obama administration as well; the trustee, for instance, testified on Holder’s behalf in his confirmation hearing. Given this ‘tangle of relationships,’ Holder must appoint an independent investigator. Until that happens, citizens on both ends of the ideological spectrum will be left to wonder whether cronyism—not objectivity—has blinded lady justice.”

 

I object to use of the word “cronyism” to describe the relationships between government officials, law firms and Corzine.  We’re not talking about some “good ol’ boys” cuttin’ some deals over lunch.  We’re talking about a criminal enterprise organized for the purpose of robbing ordinary people and looting institutions.  In this enterprise, the conspirators are no more “cronies” than members of the Mafia conspiring to rob a bank.

I also object to use of the phrase “tangled web” to describe what is, in fact, a sophisticated and organized criminal enterprise composed of various governmental and financial gangsters.

•  The recent “Libor” scandal in Europe makes clear that corruption in the upper echelons of major banks is not confined to Wall Street. It’s global.  This isn’t just “cronyism”.  It’s organized crime on a scale that makes the Mafia look like Boy Scouts.

 

LIE #3:  Government is honest

• Cops.  If describing government as a criminal enterprise seems extreme, consider your local police who: 1) are shielded from personal liability by “de facto” and “official” immunity laws; and 2) often exploit their “immunity” and the modern police state by acting like Nazi storm troopers.

Item:  Florida’s Sun-Sentinel conducted a 3 month survey and discovered “almost 800 cops from a dozen agencies driving 90 to 130 mph on our highways.”  The police charged with enforcing traffic laws are flagrantly breaking them.

Item:  The New York Times reports that “The New Orleans Police Department and the United States Department of Justice announced a far-reaching agreement to overhaul the city’s scandal-ridden police force.”  What are these “scandals” all about?

A:  Lawless (criminal) acts routinely perpetrated by the “Nawlins” cops.

Item:  Russia Today headline:  “Anaheim [California] mayor demands federal investigation after cops kill two men in two days”.  The mayor can’t control his own cops and must call the feds for help.  The cops have become as arrogant and lawless as Congressmen, Senators and Presidents.  They are a law unto themselves.

Item:  People who video police making arrests, etc. frequently have their cameras seized and/or are arrested for some trumped up charge like “obstruction of justice” or similar lie.

Item:  Chicago Tribune headline: “City settled Burge torture case, avoid [former Mayor] Daley deposition”:

 

“Aldermen today recommended paying more than $7 million to two men who say they were tortured by former Police Cmdr. John Burge, a move that means former Mayor Richard Daley will not be deposed about he may have known about one of the cases. “

Yay!  The former Mayor will be shielded from personal liability for a mere $7 million!

Well, boy, that sure inspires my confidence in government and the economy.

Two men were tortured by a Police Commander and the Mayor apparently knew.  The City of Chicago is paying the victims $7 million rather than go to court and force former Mayor Daley to testify to whatever he knew or authorized in this matter.  Note who’ll be fined for the torture: the taxpayers who’ll cough up the $7 million to pay for the cops’ crimes.

•  Governmental corruption is not confined to the lowly police.  US Attorney General Eric Holder—America’s top law-enforcement officer—has been shown to be involved in a criminal enterprise (“Fast and Furious” gun smuggling) and perjuring himself to Congress.

Does any officer in government care?  Apparently not.

Instead, the principle espoused by former President Nixon (“When the President does it, that means it’s legal.”) has now been extended to Attorney Generals and other high officials.

But the people care and therefore lose some confidence in the “system”—and the economy tends to degrade.

•  Congress.  Bribes are excused as “political campaign contributions” and the Congress and Senate are dominated by treasonous whores for sale to the highest bidder. Public approval (and trust in) Congress is at the lowest level in generations.

•  Illegal aliens.  Our government has welcomed and even encouraged illegal aliens to enter the US.  We even have a president who may be an illegal alien, and virtually no one in a position of national political power or the mainstream media cares enough to even mount a credible investigation.  No one gives a damn about enforcing the laws or protecting our borders.

•  But with every criminal act committed by cops, bankers or Congress, public confidence wanes.  Institutionalized corruption inspires public fear, saps our confidence, and nudges our economy closer to depression.

 

LIE #4:  FRNS are Money

The “mother of all lies” on which our economy depends is the belief that Federal Reserve Notes (“FRNs”; the green pieces of paper in your wallet or the computerized digits in your credit card) are “money”.  Because those FRN’s “spend,” almost everyone has been conditioned to believe they are “money”.

Very few people appreciate the fact that real money (gold or silver) is a payment and paper currency is, at best, a mere promise to pay.

MoneyNews.com recently headlined: “Faber: Massive Wealth Destruction Coming, Well-to-Do May Lose 50%”:

 

“According to economist and investor Marc Faber (author of the Gloom, Boom, and Doom Report), the critical question over the next decade isn’t ‘where will my returns be highest?’ but ‘where will I lose the least money?’”

The answer to Mr. Faber’s question depends on your definition of “money”.

To illustrate, let’s suppose that, during America’s Civil War, the Confederacy not only printed paper “Confederate Dollars” but also coined Confederate gold or silver coins.  Today those paper Confederate Dollars are basically worthless, but Confederate gold and silver would still be valued as real money.

Similarly, those who believe today’s paper dollars are “money” are going to lose their assets when that lie is finally seen. We may go through hyper-inflation before that lie is exposed, but the “truth will out”—and when it does, the difference between fiat currency (paper and digital “dollars”) and real money (gold/silver) will be apparent to all.

“Faber stated, ‘I think somewhere down the line we will have a massive wealth destruction. That usually happens either through very high inflation or through social unrest or through war or credit-market collapse.  I would say that well-to-do people may lose up to 50 percent of their total wealth.’

Under the theme of “what can’t be paid, won’t be paid,” I’ve predicted for at least 5 years that at least 50% of our paper wealth would be destroyed—and more likely, 80 to 90% would eventually be destroyed. In a world where the total debt (promises to pay) is too great to ever be kept, most of those “promises to pay” are lies.  Inevitably, those lies will be exposed, the associated debts will be shown to be worthless, and those storing their wealth in the form for paper debt instruments will suffer huge losses.

In an economy based on lies, the biggest lie—the one lie all the other lies are meant to protect—is the belief that paper or digital currency is “money”.  Those who believe that lie will lose 50% to 90% of their wealth.  Those who reject that lie, will preserve their assets seeking payments (in gold or silver) rather than promises to pay (paper debt instruments) that can’t be kept.

 

Remedy:  Abandon financial instruments and abandon the financial system

According to Hera Research, LLC:

 

“Large-scale financial crime means that there is no longer any institution where financial assets can be safely held.  Few investors, savers, workers, entrepreneurs, small business owners or retirees understand that nearly all of the decisions presented to them lead to the same government approved piranha tanks, e.g., the Federal Reserve’s Primary Dealers [of paper debt instruments].  The oldest and deepest root of the crime wave is the institution of central banking itself.  Owning hard assets free and clear (without any associated debt) outside of the financial system is the most likely way to preserve wealth and purchasing power.”

Currently, only a small segment of the public understands the degree of corruption that dominates in our financial and political systems.  But awareness grows with each day’s new reports.

As a result, the public is:

1)  Abandoning financial instruments (paper promises to pay) and seeking to obtain real money (gold and silver) that constitute real payments;

2)  Abandoning the financial system (banks and similar institutions) that are, at the top, run by well-dressed, corporate crooks whose ultimate intent is to rob their own depositors and institutions (much as John Corzine and/or his associates looted MF Global).

 

Truth as Remedy

As people begin to see the depth and breadth of the lies, they lose confidence in their government, in their institutions, in their jobs.  In part, the economy begins to grind to a halt because “they pretend to pay us (with paper debt instruments), and we pretend to work”.

We aren’t simply facing an economic crisis based on numbers and mathematical formulae.  We’re facing a moral crisis.  The solution to our economic problems is not simply to adjust the interest or employment rates.  The solution must include holding people in positions of power accountable for every criminal act they commit.  The solution is to reestablish confidence in the a “level playing field” and the idea that the laws apply as equally to the rich and powerful as they do to the poor and middle class.

We don’t need an economic revival, we need an honest government.  We don’t need an “economic recovery,” we need a “moral recovery”.  Until we get one, our “economy” will continue to degrade.  No amount of QE3 (paper currency/lies masquerading as “money”) will solve our problem.

The economic “truth” may not set us free, but it can shield us from an economy that’s increasingly and openly dominated by corporate criminals whose only objects are theft, treason and national destruction.  The seemingly improbable, unbelievable but fundamental truth that might save us is understanding that paper debt-instruments are not money.  Gold and silver are.

Those who understand that truth and begin to distance themselves from the “house of cards/paper” created by our Federal Reserve and fiat currency, won’t necessarily live happily ever after. But if they get clear of the “house of paper” that’s built on governmental lies, they just might survive the coming economic—and moral—collapse.

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