So, where are we, after several years of pointing out that the current regulatory scheme is a joke, and that the market players are literally stealing the savings of America by creating stock out of thin air, while the regulators and Congress stand by, or assist?
We've made some progress in getting visibility. And there are some important lawsuits in the works.
Other than that, the SEC continues to pretend that it is going to do anything at all to curtail the illegal and immoral activities of Wall Street, while in fact doing absolutely nothing. Congress allows that to continue. The media supports Wall Street's goals. All one nicely symbiotic package. The only ones losing are the citizens of the US, and anyone invested in the markets.
Here's an easy to grasp summary for everyone to latch onto, partially based upon an email response I sent a few minutes ago.
The NY bankers who largely are the market - the members of the NYSE and owners of the DTCC - control that market with an iron fist.
These are the same banks who are the controlling members of the Federal Reserve System, which isn't federal, has no reserves, and isn't a system at all. It is a collection of private bankers who have created a cartel, now almost a hundred years old, in partnership with the government. The government gets unlimited access to money creation with a veneer of arm's length oversight, and the banks get to charge interest on money they create out of thin air at the behest of the government. That's a simple recipe.
Congress wants to spend far more than the assets of the nation will support. Congress doesn't want to raise taxes to 98% of all income generated, or there would be another revolution. So Congress allows the Fed to loan out and charge interest on money the Fed creates, at the bequest of Congress. Congress gets to spend recklessly with no accountability. The privately owned Federal Reserve banks get to charge everyone they lend this newly created and deposited money to, interest, on something that costs them nothing to create. Imagine what interest on a trillion dollars of newly created money is, every year? Two trillion? Many trillion? We don't even know how many trillion anymore, as the government summarily decided to stop publishing M3 - the money supply statistics.
Collecting interest on 10 times whatever is created out of thin air, in perpetuity, for the benefit of your private banking business. Your banking profit to keep.
That's a hell of a business. Has been for a long time. The dollar has lost at least 1000% of its value over the period the Fed has been doing this - value lost due to the aforementioned dilution due to more money creation. That minimum 1000% loss also is a good proxy for the amount of real value that the banks have earned during that period. Actually, likely orders of magnitude too low. But I digress.
Now the same banks are doing the same thing with a different currency - stock.
They are creating stock out of thin air, by allowing serial lending from margin accounts, and charging interest on all those loans of assets they don't own. Sound familiar? Earning billions and billions loaning something with zero cost of goods sold. Earning interest on all those loans of the same share, over and over and over.
"They" are also now doing the same thing by simply creating an unlimited number of electronic IOUs, and charging interest for folks on margin to buy those worthless chits, as well as to those borrowing to support those worthless chits - the stock lending business is bigger than ever in history. Again, that would be making money loaning assets Wall Street doesn't own. Charging interest on those loans of stock it doesn't own, and now, even possess.
Same banks. Same guys. Same scam.
That's why trillions in new innovations and profitability can be created by public companies, and yet the indexes hardly move - the juice is being sucked out of the system with this excess "liquidity" just as the juice of the dollar's buying power has been eviscerated with the "liquidity" of a flood of new dollars backed by nothing but the government's IOU. The "liquidity" in this case has removed the annoying middle man - the government - and simply backed this newly created liquidity with Wall Street's IOU. Which is worth whatever the banks feel like paying before going to their partner, Congress, and threatening them with a meltdown if they don't make the taxpayers bail them out. That is how private banks can get the government to cover their bad debts, and their risks, and their crimes.
That's the nutshell version of how a handful of private bankers can control a government. And can control how the laws are enforced, and who they are enforced upon.
Remember, same banks that are the largest movers on Wall Street also are the government's partner in the Federal Reserve cartel. No other word for a partnership of private entities (banks) coming together to monopolize an industry.
So is it any wonder that the same guys are pulling the same stunt in the markets? If so, why? Why wouldn't they? If they can get the same apathetic response from the public that explaining the Fed banking system gets, why not? The DTCC is the stock market Fed, the stock market central bank. Simple. Owned by the same guys. With the same objective of all cartels - to make its members profits. That is the only reason cartels exist - to enhance its members profits, or deliver an equivalent benefit to its members (like unlimited access to capital). Simple.
That's where we are. The SEC is pretending to do things, while it does nothing that would curtail this behavior. Why? Because it knows that its master - Congress - doesn't want to piss off its banker partners any more than it does, as those same banks are its future employers.
So the banks continue to leach out most of the juice from the American economy, dissatisfied with "only" the interest on the many, many trillions they loan in dollars. Now they want to get an additional chunk by lending your assets multiple times, and charging interest on loaning your assets. And worst of all, dissatisfied with that, too, they now create stock out of thin air, exactly as the Fed creates money, and then lend that newly minted stock to hedge funds, charging interest and generating fat fees all the while.
That's the why of it. We all know the how of it.
And nobody in any position of power is going to do a single thing to change it. Not that I can see. Maybe the states will, because they aren't beneficiaries of the cartel scheme - that is a partnership for the enrichment of the federal apparatus, and the banks. The states don't really get any of the benefit. So maybe they will force the laws to be enforced locally. Maybe.
Make sense? Can anyone punch any holes in this? I can't. Go ahead and refute away. But I don't expect much besides name calling. Because I just gave an entirely accurate description of what is going on.
And that's my Summer State of the Union.