[This is another Guest Post from Patrice Ayme which appeared on his Blog on the 28th April. It has been slightly modified by me. Ed]
Celebrating Goldman Sachs, while acknowledging that it is far from being all their fault.
Point One: We are living in a state of law. Supposedly.
Point Two: That State is democracy, the rule of the demos, the people. It is not the rule of the bankers. Supposedly.
Point Three: Political leaders have recently given PRIVATE unelected individuals, the bankers, the means and the right to create money, the money everybody uses, through debt, ex nihilo, starting from PUBLIC funds (Called, somewhat misleadingly, the fractional reserve banking system.)
Point Three contradicts the union of Point One and Point Two. Power is supposed to be exerted by the people, but money is power. Big bankers create money at will, with the complicity of the political leadership. So they create power at will.
Thus, the present system incites (big) MONEY CREATING BANKERS TO BECOME GANGSTERS, and then OUTLAWS.
It is as simple as that!
Thus one needs to get rid of the private fractional reserve PUBLICLY funded money creating system. The situation has been rendered worse in the last decade by the blossoming of synthetic derivatives which are out-of-this-world bets which could not possibly be paid back.
Synthetic derivatives of derivatives transformed a 300 billion dollars loss in real mortgages into a potential exposure of 24,000 billion dollars, thanks to the leverage of the derivatives squared.
Then political leaders, accomplices with the bankers, offered to pay the 24,000 billion dollars, on behalf of taxpayers, leaving the economy in tatters.
Not all is lost: Goldman Sachs got its entire 2008 profit, 13 billion dollars, from taxpayers, through AIG, thanks to US politicians, and the USA loves a winner. Love and dove, there are still many a feather to pluck.
By Patrice Ayme
P.S. Synthetic derivatives are, mathematically and philosophically, a generalization of the license of the privately managed, publicly funded, fractional reserve system, thus proving further, if need be, how erroneous the latter can be.
P.P.S. The fractional reserve system ought to be kept, to provide the capital needed, simply it ought not to be anymore the province of a small private oligarchy gaming it.
Learning from Dogs 
Point Three: Political leaders have recently given unknown unelected financial regulators who are gathering in a place called the Basel Committee the powers to decide what’s risky and what’s not and to discriminate accordingly. http://bit.ly/bniNuD
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Per:
Agreed. the Bank of International Settlements was a companion Nazi organization, of such great importance that it (barely) escaped prosecution during de-Nazification. But all this has been successfully buried, forgotten, forgiven, and sublimated…
PA
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I am not referring to Bank of International Settlements but to the Basel Accord that leads to the Basel Committee, and lately a slightly more expanded Financial Stability Board, and by which all some few and too similar minded regulators are setting up rules for all banks in the name of a global unification of regulations. And by the way the Nazi references seem to me quite out of place in these discussions.
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Are you a fan of H.R. 1207, the bill to audit the Fed?
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Let me explain it like this. I am not a US Citizen so I feel more inclined to question the Basel Committee than the Fed http://bit.ly/aEQdcL
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Per, that link to your piece on your Blog Tea with FT says it all very clearly. I know you would be happy having that as a Guest Post on here. Coming out soon, Paul
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Not that being a US citizen means much: see the guy from Pakistan, a fresh USA citizen, who did not know the difference between explosive, and non explosive fertilizers, and moreover forgot to open the gas bottles of his Times Square car bomb…
Seriously, we are all in the same financial boat, although, indeed, the ECB (say) has a different construction than the Fed (the ECB is more independent of private banks). So, if we care about our future and that of future generations, we have a right to our opinions. And they are certainly more qualified than that of the banksters.
PA
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The Fed claims to be independent. As I pointed out somewhere else, the Fed, a creation of the private banks, means by that its independence from DEMOCRACY. So I did not read that bill, but yes, the Fed ought to be audited down to the last cent.
It is known that the Fed has given secret enormous funding to private plutocratic “institutions” (i.e., for profit banks). This is beyond the loud TARP like support, it’s hidden underground.
PA
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Much of what has gone on has been legal theft and totally immoral.
Almost anything can and will be abused by greedy Humans and the bankers’ power certainly has.
If they do not get punished then it sets a very bad example …. People will eventually throw up their hands and say “Oh well, if you can’t beat ’em, join ’em.” I am not personally aware of many of the top bankers responsible for this fraud losing their shirts. Are you?
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I am not aware of any regulator or any of those financial experts and PhDs wearing a cone of shame either… in fact many of them are doing their media speaking engagement tours selling themselves shamelessly as financial crisis autopsy experts.
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They have never been more glorious. See Warren Buffet in recent days crowing about Abascus, thus creating his own smoke screen for his giant official public-private insider trading with Goldman Sachs…
PA
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Chris:
It’s beyong punishment. First, it has to stop. Indeed capital is presently diverted by the money creators, namely, as it is, the private bankers, towards derivatives and shadow banking, and thus aay from the real economy, causing a NON DEVELOPMENT crisis in the so called “developed” world.
So first stop. Later, punish.
PA
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