Amidst the global financial correction the large majority of financial advisors and investment managers are eating their words with bitter medicine. Watching videos like this one with Peter Schiff battling the prevailing pundits illustrates just how many truly incompetent investors drank the economic kool aid. In retrospect, it’s amazing that any of these people still have jobs, their predictions were so wrong. Either they were simply ignorant, or caught up in the exuberance of the security boom, or were willingly gaming the system for their own benefit (like mid-level pyramid schemers trying to convince the rest of us to give them our money). In my opinion, there should be a public registry of every analyst, fund manager, and securities broker who deliberately and vocally espoused the unstoppable growth of the credit & securities market while publicly trashing the work of those who saw the writing on the wall.
Indeed, some names are now recognized for the predictive value of their somber analysis in the face of so much Pollyanna positivism. The aforementioned Peter Schiff of Euro Pacific Capital was a voice of sanity, publicly battling pundits and analysts back in 2006 (watch the video linked above). Recent economic Nobel laureate Paul Krugman has been saying what nobody wanted to hear, and doing it in a highly politicized way, for years now. And of course Nassim Nicholas Taleb has been talking about the hollow economic boom and it’s pending meltdown for years, making his clients 50% returns even now during the crash. And to his credit, though I don’t think he should be running the country Ron Paul has been taking the Federal Reserve and private banking community to task over their criminal mismanagement of the US dollar.
The US financial system shifted in the 1970′s and the radical growth since has been built on massive credit expansion while simultaneously reducing manufacturing and production. We and much of Europe are debtor nations. We borrow and borrow but don’t have enough revenue income to support our debts. Now as the system shakes out many of the financial organizations that got us into this mess are looting the US Treasury grabbing all they can before it goes bust. Simply amazing that we let them do it and Paulson isn’t even providing a paper trail of where the money’s going. Sadly, much of it is leaving the country moving into offshore tax havens like the Caymans and Luxemborg.
I’m just about to start reading Naomi Klein’s “The Shock Doctrine”. I’ve followed her work and already know the outline of her theory here: that the Powers That Be have grown into the habit of engineering catastrophic events that simultaneously pad their vaults with cash while creating enough social instability and fear that the next round of legislation that favors the wealthy elite can be pushed through as absolutely critical to stave off the apocalypse right around the corner. I generally don’t see the world or The Great Conspiracy as being entirely monolithic, though most conspiracies have some truth to them, as we’ve seen history reveal. Nevertheless, I’m seeing more and more data that supports the notion that certain elite interests would prefer that Democracy fade away and we return to the glory days of monarchies and autocracies.
The recent US election has brought some hope to my eyes but I remain highly suspicious. If the fundamental way in which we manage global business and finance is not radically altered, greed will continue to win out and the Obama presidency will simply set up the next artificial bubble to be pillaged by the mad industrialists. If Goldman Sachs and their ilk make headways into the new administration, you can expect they will continue to forge financial policies that pad the coffers of their clients at the expense of the public. As we’ve seen time and time again, the wealthy elite always prefer to privatize profits and make losses a matter of the public. They get rich and we bail them out.