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The Endgame, Trump and Gold

Donald Trump is an accelerant in a burning house of cards

by Darryl Robert Schoon, Gold Seek:


In the bankers’ endgame, slowing economic growth and excessive central bank liquidity forces investor capital into financial markets; driving up the price of stocks, bonds and commodities and creating financial bubbles whose collapse pose a systemic threat in overly-indebted capitalist economies.

http://www.economist.com

 

DEREGULATION AND THE ENDGAME

Fundamental and pragmatic banking regulations, which arose from the devastating financial collapses of the Great Depression, for decades strengthened U.S. banks andcapital markets, making them the twin engines of American growth and the envy of the world… The systematic dismantling of those same regulations by greedy bankers began in earnest in 1980, peaked in 1999 [with the repeal of Glass-Steagall], and finally climaxed with an insane Securities and Exchange Commission ruling in April 2004, a final decision that paved the way for the implosion of everything regulation was designed to protect.  

Shah Gilani, How Deregulation Fueled the Financial Crisis, January 2009

 

After investigating the causes of the Great Depression, Congress passed the Glass-Steagall Act in 1933 to prevent banks from again betting America’s savings in Wall Street casinos. Beginning in the 1960s, Wall Street banks tried 25 times to repeal Glass-Steagall, finally succeeding in 1999 after spending $300 million lobbying, i.e. buying, politicians’ votes. 

 

In the Senate, 53 Republicans and 1 Democrat voted to repeal Glass-Steagall with 44 Democrats opposed.  President Bill Clinton (D), however, sided with the Republican majority and Glass-Steagall was repealed.

 

Clinton’s Secretary of Commerce was Wall Street profiteer extraordinaire, Robert Rubin, former Chairman and CEO of Goldman Sachs. After the repeal of Glass-Steagall, Rubin was appointed chairman of Citigroup which sold hundreds of billions of dollars of fraudulent subprime mortgages. Rubin made $126 million during the subprime crisis and US taxpayers paid $350 billion to bailout the bank. In 2010, the Financial Crisis Inquiry Commission referred Rubin to the Dept of Justice for possible prosecution for crimes committed during the subprime crisis. The DOJ did nothing.

 

Deregulated markets allow financial predators, i.e. Rubin et. al., to criminally profit in the absence of oversight and the rule of law.

 

 

 

The repeal of Glass-Steagall…was a continuum of the radical deregulation movement. This philosophy incorrectly held that banks could regulate themselves, that government had no place in overseeing finance and that the free market works best when left alone. This belief system manifested itself in damaging ways, including eliminating regulation and oversight on derivatives, allowing exemptions for excess leverage rules for a handful of players and creating dangerous legislation.

Barry Ritzholz, Washington Post, 2012

 

The repeal of Glass-Steagall in 1999 was followed by the 2008 financial crisis when Wall Street banks bet billions on suspect subprime mortgages, banks collapsed and taxpayers were forced to bailout the very bankers that had dismantled the regulations intended to prevent another collapse.

 

Today, banking regulations enacted after the 2008 financial crisis are about to be repealed as Trump and his coterie of Goldman Sachs bankers—Steve Mnuchin (former Goldman Sachs partner), now Trump’s nominee for Secretary of the Treasury, Steven Bannon (former Goldman Sachs managing partner), now Trump’s chief strategist and senior counselor, and Gary Cohen (president and chief operating officer of Goldman Sachs),  now Trump’s top economic advisor—give Wall Street’s criminal cabal even greater access to what remains of America’s wealth, bringing the nation and the world closer to a catastrophic financial collapse.

 

THE COMING CRISIS

The new crisis will be of unprecedented scale…Since we have vastly increased the scale of the financial system since 2008 with larger banks, greater concentration of banking assets in fewer institutions, larger derivatives positions, and $70 trillion of new debt, we should expect the next crisis to be much worse than the lastpolicies to avoid a systemic catastrophe include reinstatement of Glass-Steagall, breaking up big banks and banning derivatives. The odds of any of these policies becoming law are close to zero because of the power of bank lobbyists.

James Rickards says Donald Trump can’t stop the next financial crisis, Marketwatch, 12/27/2016

 

Jim Rickards in his latest book, “The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis, predicts in the coming crisis the banking system will be frozen by banking authorities until the crisis is over.

 

The crisis, however, will be unlike any other because the banking system can’t be fixed. Today, the bankers’ edifice of credit and debt is beyond repair; and because the crisis will be so extreme, the government’s response will be even more extreme than during the Great Depression when banks were closed, triggered by a run on gold.

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