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Metastasizing Monetary Cancer

Banking fraud, done on a small scale, is tolerable.

Yes, it distorts property rights.  It cripples savers.  It encourages speculation in unsustainable projects.  It rips apart the lives of marginal communities and small farmers.  It corrupts governments.  It facilitates counterfeiting.  It encourages parasitic, predatory behavior.  It narrows everyone’s focus on short-term financial gain.

But done on a small scale, these effects are marginal, like the slow growing mole on your back.

But when the financial system completely distorts the price mechanism, it’s like the mole has grown into the size of a football.  The cancer is everywhere.  Everyone becomes a banker.  In other words, everyone tries to steal as much as they can as quickly as they can and flee the consequences – or at least shove them onto the government to fix later.

Bankers inflated the housing bubble in the US.  Now we find the documentation supporting the mortgages is rubbish.  So the debt slaves are fighting to stay in their foreclosed houses – effectively for nothing.  The master-slave relationship is breaking down.  Cats are sleeping with dogs.  Slaves are rising up against their masters, not respecting the ‘moral’ arguments that the masters were using to keep them in financial slavery.  The bankers are not getting their interest payments and the security has turned to mush.  Every single investor who has an interest in a CDO has no f*cking idea what they’ve bought.  The value is effectively zero until this is sorted out.  This stuff is currently on the books of banks and pension funds to the tune of hundreds of billions of dollars.

Property rights have turned to mush.

As I said, a little cancer is OK.  But when everyone is in on the scam, the cancer turns malignant.

And what we have here is one gigantic cancer that has become visible to everyone.  Including the cancer cells themselves.

Categories: Miscellaneous Musings
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