News Link • Corruption

U.S.O.F.C.: If the Fraud Stops, the Financial System Collapses

01-09-2011 • OfTwoMinds.com/blog

What happens if fraud and misrepresentation of risk is expunged from the U.S. financial system? In President Bush's memorable phrase: This sucker's going down. There is a fascinating disconnect between the "law and order" society ceaselessly depicted on TV and the realities of the American financial system, which is now totally dependent on lies, fraud, embezzlement and misrepresentation of risk. Remove those and the system implodes. As I observed in Fraud and Complicity Are Now the Lifeblood of the Status Quo: Fraud, collusion, embezzlement, manipulation and misrepresentation of risk are not isolated incidents, they are now the essential fabric of our entire financial system. Though fraud and complicity are presented in the mainstream media as isolated conspiracies outside the status quo, the truth is that the status quo is now entirely dependent on fraud and complicity for its very survival. Every level of the status quo would immediately implode were fraud and complicity suddenly withdrawn from the system. Bernie Madoff's Ponzi Scheme was systemically ignored despite its blatant transparency and warnings submitted to authorities. Even a financial neophyte could see that Madoff's options bets were an order of magnitude too small to generate the vast profits he was claiming. Why were warnings ignored? Because the Status Quo implicitly understands that misrepresentation and fraud are the essential lifeblood of America's financial empire. Impose "law and order" on the Wall Street/mortgage crowd and what do you get? "This sucker's going down."