Roubini, a Clinton admin economist, is making good money as a consultant, and hates it when the market recovers since he is the gloomster of the hour.
“U.S. Stocks Retreat on Skepticism Over Bernanke’s ‘Shell Game’”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGB4yJpq4GR4&refer=home
Our government needs to also ask “Who was in this with Madoff?” This scheme was to big for one person. I would bet that it goes back to some in our Congress. Maybe that is the reason why a full trial was never held. (or is one coming?)
The last bubble before everything comes tumbling down would be the US.
btt
“Ponzi government”
That’s a keeper.
The federal government created this system by enabling banks to engage in an ever greater degree engage in fractional reserve lending.
As a direct result anytime a bank gives out a lone in excess of its assets such as is fractional reserve banking is, that Bank is creating defacto inflation in the medium of the lone which it has given out(the Dollar). Meaning: There are more dollars out there chasing the same objects.
So because Wall Street like an increasingly large number of our business deal with theses Banks in stocks and otherwise their growth can be traced and built upon the expansion of the currency the same banks create with their factional reserve lending.
However the same expansion also forces investment growth because other people are forced/encouraged to play ball or lose the money to inflation anyway.
So now we have a recursive system where we got an investment economy that thou fractional reserve banking causes inflation, and the same inflation forces/encourages even more investment by everyone else in the real(producing) economy of remaining assets.
This whole recursive system will continue to play out until people either:
1: Run out of money to thou into it. (the banks hit their limit and stop lending)
or
2: The inherit risk-based losses of the Bank's lending overwhelms the actual capital held by the Banks.
or
3: The people panic and for whatever reason run on the bank reviling the whole fraud, and causing economic loss of the now nonrefundable (but really nonexistent) bank assets
No matter what happens mathematically as long as the REAL assets in an economy are finite or growing at a rate slower than the bank/government induced currency inflation. One of theses things will happen its just a question which happens first. It's like playing Russian Roulette with 3 different bullets in an otherwise empty gun once a day every day, whether one of the bullet is in the first chamber or all are in the last 3 you will get to one of them eventually, its not anymore avoidable than our actual assets are infinity.
Believe it or not frequent occurrences of #3 is preferable while the scale and spread of the investment is still small as so that it never gets large causing a system wide failure which leaves almost no one unaffected to buy up the foolish assets and effect economic recovery. While fractional reserve banking fraud may be dated back to the roman days and before when government did this with gold debasement of their currency. The actual practices on the individual level goes as far as anyone can get away with it.
But insolently when the government doesn't back it with the currency and “national banks” it tends to be a lot more isolated and small scale.
This is in fact what uses too happen in the United States before we and our significant trading parters had national banks manipulating the currency. In fact the local/ state banks that engaged in fractional reserved lending typical didn't last long and their notes were general valued less than the stated value.
This is because the economy realized in most all cases rather quickly all of them like the current national banking system as I described could be compared to the same Ponzi Scheme, due to the nature of the way they invest and inevitably collapse. There is a significant risk factor in the reliability of a bank note which detracts from its stated value.
People forget that when the bank note becomes so large that the risk is mute or its backed by the government, which will in effect make the risk to the individually mute.