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Smashing The Big Banks: Only The First Step

Articles & Blogs - US Commentary

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It was encouraging to see a recent article in the N.Y. Times arguing for the necessity of smashing the Big Bank Oligopoly in the U.S. Apparently not everyone has forgotten the basic fundamentals of economics.

Going all the way back to Adam Smith; all the economic theorists have acknowledged a central premise of capitalism: oligopolies (and/or monopolies) are predatory, parasitic abominations which can never be allowed to evolve in our economies. Or, as I put more succinctly in a previous commentary, “too big to fail = too big to exist.”

This premise is so self-evident that it should not even require elaboration. Yet the fact that these Vampire Banks not only exist but continue to grow shows that this simple truth is still not grasped by more than a small fraction of the population.

What is “too big to fail”? It is a group of (arrogant) Banking Oligarchs saying to the U.S. government (and governments across the West): “we’re so important that you must save us…or else.”

This is extortion. It cost U.S. taxpayers somewhere in the neighbourhood of $15 trillion in assorted hand-outs, 0% “loans”, and “guarantees” when Wall Street made its extortion demands in 2008. Since that time, the U.S. economy is much weaker, much more debt-leveraged (i.e. insolvent); and the Wall Street Vampires have been allowed to get even bigger.

The result? Serial extortion – in the form of the latest “QE” from the Federal Reserve: $500 billion per year in blackmail payments, ad infinitum. Purchasing the worst financial feces from the Wall Street Vampires, and taking this directly out of the pockets of ordinary Americans (via currency dilution).

Incredibly, the Sheep still don’t understand even this bankster crime of theft-in-broad-daylight, so perhaps a simple example will illustrate it. Seven Castaways are stranded on a desert isle. Even though they only have one “good” to purchase in their economy (coconuts); one of the Castaways happened to bring along a printing press, and so they decide to have their own money.

Ten Coconut Dollars are printed for each Castaway per month. Suddenly, one month one of the Castaways (let’s call him “Gilligan”) gets a brilliant idea as to how “they can all get rich”: print more money. Instead of printing only ten Coconut Dollars per Castaway each month they would print one thousand Coconut Dollars. So even if they never got rescued, they would soon all be “rich.”

Lacking any “Professor” to explain the folly of Gilligan’s plan, they all agree. However, what the Castaways quickly discover is that none of them are getting any wealthier at all. With their tiny island economy flooded with Coconut Dollars (one hundred times more), all that has happened is that prices also increased by a factor of one hundred.

Now let’s change our scenario slightly, and introduce a new Castaway: “Banker.” Banker happens to be the owner of the printing press, and Banker gets a different idea for “getting wealthy.” With complete control over the printing press, Banker decides that from now on while each of the other Castaways will continue to get ten Coconut Dollars each month that he will receive one thousand Coconut Dollars monthly.

Suddenly the dynamics change dramatically. Instead of our first example, where no one got any wealthier as price increases (naturally) matched the increase in the money supply; we have a much different scenario. Banker becomes wealthier and wealthier, as he continually gets a massive, new supply of Coconut Dollars.

 

So even though the price of Coconuts is soaring, only Banker is unaffected by the price increases. Note however that Banker can only get richer through this money-printing inequity at the expense of all the other Castaways getting poorer. This is the Western financial paradigm: Banker(s) gets all the Coconut Dollars. We all get poorer and poorer; while their own, endless, massive supply of new paper ensures that “inflation” only affects the Little People – not the Vampires.

The absurd lie is that handing the Vampires endless trillions of newly-created money will somehow “create jobs.” After all the $trillions printed and handed to Wall Street since 2008, does anyone see any jobs being created?

In fact, as this extreme, serial currency-dilution intensifies (known by the euphemism of “competitive devaluation”), and the Average Person gets poorer and poorer and poorer; it should surprise no one to look at the chart above and see less and less people working. Yet we’re supposed to believe that no one in our governments (and of course no one in the Corporate Media) can figure out that if we allow the Vampires to gorge on all the “new blood” in our economies that the rest of us our doomed to die of economic anemia.

This is only one of the mega-crimes of these mega-predators (the largest of them). Documenting even just the largest of their financial atrocities would require an encyclopedia, but it’s at least worth noting the next two mega-crimes on the list.

The banksters’ $1.5 quadrillion “derivatives market” is nothing but a rigged casino, so crooked that “the House” won’t even pay-off on its losing bets if its not convenient for them – as we saw with their refusal to make payment on credit default swap contracts, following the Greek debt-default.

Then there is the banksters’ $500+ trillion LIBOR fraud. Despite the fact that this fraud has (almost) been completely exposed; the Vampire Banks have so much power over our governments that they continue to operate this scam, with impunity. Nowhere here do we see any evidence of “too big to fail” – i.e. a need for the continued existence of these financial predators – while everywhere we see evidence that they are, indeed, “too big to exist.”

However, there is a much broader point to be made here. The banking oligopoly is only one form of this economic cancer which has ravaged the global economy in general, and Western economies in particular. The multi-billion Oligarchs have been permitted by our governments to divide-up (and plunder) most of the global economy with oligopolies in virtually every nook-and-cranny of our societies.

Yes, the Big Banks must be smashed; reduced to a tiny fraction of their current size, and never permitted to swell to such a predatory/parasitic size ever again. But what must be understood is that all of these oligopolies extort money from our societies in one way or another. While the hand-outs to the Wall Street Vampires have been the largest and most visible form of corporate welfare/extortion; corporate “subsidies” across the West now amount to $trillions per year – in one form or another, and continue to grow.

Cancer comes in many forms, yet there is broad consensus of the need to (at least attempt to) eradicate all forms of this disease. Oligopolies and monopolies also come in many forms, and it is equally imperative that we acquire a consensus on the need to eradicate this “disease.”

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Comments (3)Add Comment
Jeff Nielson
...
written by Jeff Nielson, December 18, 2012
...You could take it further with Banker offering to look after the other islanders` coconuts for them and then issuing certifcates of ownership, more than physically exist so that prices don`t go up from the excess coconut dollars until the paper coconut scam is exposed and coconuts go to the moon! Banker makes out again because he has spirited away all the real coconuts onto another island with his Banker buddy!


Dylan, addressing a comment to a writer who just used a "Gilligan's Island" analogy that you would have liked to have seen a little more subtlety/nuance seems like wishful thinking to me... smilies/grin.gif
Dylan
...
written by Dylan, December 18, 2012
Great analogy Jeff, it just described the Weimar hyperinflation better than most writers.
You could take it further with Banker offering to look after the other islanders` coconuts for them and then issuing certifcates of ownership, more than physically exist so that prices don`t go up from the excess coconut dollars until the paper coconut scam is exposed and coconuts go to the moon! Banker makes out again because he has spirited away all the real coconuts onto another island with his Banker buddy!
apberusdisvet
...
written by apberusdisvet, December 16, 2012
Jeff: good points, as usual. But you are just one of many who have come to the fairly obvious conclusion that there is no Rule of Law anymore in our society, especially relative to the powerful elites and their continuing agenda of obtaining wealth, power and control on the backs of the rest of us. As long as the corrupt politicians are mere obedient vassals to this criminality, we have no recourse. Good rant and example nonetheless.

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