The United States became the economic wonder of the world—producing real wealth and earned prosperity for a higher percentage of her people than probably any nation in all of history—by actually making and selling stuff. We were largely free to work, and to benefit from our efforts.
Now, the Federal Reserve has enabled the financial sector to grow its slice of the pie, not by providing real goods or services, but by setting up tollbooths on the economic highway.
Charles Hugh Smith is probably the most talented communicator on these issues, but here’s another look from David Stockman—a man who has been to the top of the monetary pyramid, and recognizes a major scam when he sees it.
“Why are we plagued with drivel masquerading as financial reporting?”
One of the evils of massive over-financialization is that it enables Wall Street to scalp vast “rents” from the Main Street economy. These zero sum extractions not only bloat the paper wealth of the 1% but also fund a parasitic bubble finance infrastructure that would largely not exist in a world of free market finance and honest money.
The infrastructure of bubble finance can be likened to the illegal drug cartels. In that dystopic world, the immense revenue “surplus” from the 1000-fold elevation of drug prices owing to government enforced scarcity finances a giant but uneconomic apparatus of sourcing, transportation, wholesaling, distribution, corruption, coercion, murder and mayhem that would not even exist in a free market. The latter would only need LTL trucking lines and $900 vending machines.
In this context, the sprawling empire known as Bloomberg LP is the Juarez Cartel of bubble finance. Its lucrative 320,000 terminals and profit-rich $10 billion in revenue are not purely a testament to the extraordinary inventive genius of Michael Bloomberg The Younger. In fact, Bloomberg’s 1981 invention owed a huge debt of gratitude to Richard Nixon and Milton Friedman. It was they who destroyed the Bretton Woods regime of anchored money and global financial discipline that made “Bloombergs” necessary. [Read the Rest]
The Fed’s friends and owners skim their bloated “take” from the many games on the economic casino’s floor, and earnest savers pay the price in lost interest earnings. Many are also enticed into deeper and riskier waters where Wall Street’s most vicious sharks swim, simply trying to keep up with the corrosive inflation the Fed necessarily bakes into the fiscal cake.