Taibbi: Everything Is Rigged: The Biggest Price-Fixing Scandal Ever

London cc

Another must read article from Matt Taibbi. Yes, Taibbi still won’t go after the Federal Reserve and the biggest fixer club of them all, the FOMC at the Federal Reserve. But he has done some excellent work over the past 5 years exposing the inner workings of a financial system which is deeply flawed. (To be kind.)

His critique often gives one the impression that he thinks the market is to blame for the fraud which permeates the world economy. That greed and self interest are the reason for the abuse we see. But in a market fraud is unacceptable. If someone lies to gain an advantage unfairly  this is a form of theft and the prosecution of this theft is an entirely legitimate role for a regulating authority. (If the market doesn’t uncover it first, which it often does.)

Of course fraud and theft will always happen. But it is the Federal Reserve which makes it particularly easy these days for the “cigar chomping cabals” to operate with its constant flow of easy money and never ending enabling. Add a Treasury and Justice Department which has said explicitly that some firms are too big to prosecute and it’s pretty easy to see how the state, not the market, is the primary reason for the sorry state of high finance. The crash of 2008 and the rampant crony capitalism we see in finance now simply could not have happened without the state. In a free market crooks, once uncovered are dealt with swiftly. In our current system the crooks are able to short circuit the market mechanism.

Cheap, fiat money breeds immoral behavior. It breeds debt. It breeds derivatives which are built on other derivatives which are then built on yet other derivatives into a colossal daisy chain of financial dysfunction.   It concerns me deeply how absolutely out of hand the fiat money experiment has gotten. The collapse of this unsustainable system will shake the world on a level beyond what we saw in 2008. I have no idea when it will happen but I am pretty sure it one day will.

Hopefully it will come in fits and starts. Hopefully the market will overwhelm the system in stages. We should pray that this is the case. A sudden unwinding would be unlike anything the world has seen in a very long time, perhaps ever.

(From Rolling Stone)

The only reason this problem has not received the attention it deserves is because the scale of it is so enormous that ordinary people simply cannot see it. It’s not just stealing by reaching a hand into your pocket and taking out money, but stealing in which banks can hit a few keystrokes and magically make whatever’s in your pocket worth less. This is corruption at the molecular level of the economy, Space Age stealing – and it’s only just coming into view.

Click here for the article.