Stumbling Bank Reform or Corporate Governance?

If you step back and look at our situation from a longer historical perspective, it is obvious that we have fundamental flaws in the governing of nations around the world. The “shadow banking” world that is unfathomable to both the common folk and political “leaders” has now achieved what they always wanted — a shadow government.

The truth behind Wall Street maneuvers is on these pages, on main stream media and in hundreds of blogs all over the world. Starting in 1983, at a level of zero, Wall Street created at least $700 trillion in “shadow” currency that has world economists and political leaders pooping in their pants. In 1983 we had the equivalent of $50 trillion in world currency that was issued and regulated by governments of the world. Now we have about the same amount of government currency dwarfed by proprietary currency issued by Wall Street.

These shadow bankers control 90% of all “currency” in the world. Blankfein, Dimon and the rest of them think they deserve a bonus because they literally took control of the world — and there is nobody to stop them because nobody in power understands the logistics and even those who have a clue lack the political will or power to do anything about it.

Their weapon of choice was generically speaking, derivatives. But derivatives existed long before 1983. It was a classic case of using an existing tool, making it so complicated that nobody could audit it, and then declaring its value and use from the private sector with the government looking on in consternation because neither the regulators nor the legislators had a clue about what was happening. The same holds true in the judiciary where only a handful of Judges are beginning to understand the fake premises upon which these schemes were hatched.

Wall Street, now holding the purse strings of the world (even China) is calling the shots and they have the simple goals of money and power. They have it but they don’t have a clue how to govern. Their only political agenda is to maintain and build their own wealth and power, disregarding loyalty to any national boundaries.

The private sources of finance, liquidity and money have often enjoyed positions of great power. The difference now is that it is virtually complete — except for one thing that they and hundreds of heads of state before them fail to realize in their hubris — it only works as long as people let it work. Ultimately, as Jefferson penned it in the Declaration of Independence, government depends entirely upon the consent of the governed. And eventually,  heads roll when the people have had enough.

People submit themselves to governance under the theory that the governors they elect or allow to “rule” them will act within some bounds of decency as defined by the moment. Now people realize that their rulers are “undisclosed principals” but the identity of many of the shadow rulers is apparent to many. The people are far ahead of both the politically elected or anointed leaders and far ahead of the shadow bankers who rule from board rooms.

People will often endure hardship long after the breaking point just to maintain their own little status quo and to avoid living a society in chaos. Not forever, though. My observation is that everything is going to get a lot worse before it gets better. The “bankrupt” nations endangering the viability of the Euro got there by the same twisted manipulations as we did.

Somewhere along the line, the chains will break and it won’t be pretty. In order for people to turn the government upside down in order to make it right side up, they must be very angry. Angry people tend to do things to excess. Excess and at least temporary anarchy leave us with chaos where our life-long assumptions and security are terminated like a light switch being turned off.

I don’t know if the judiciary in this and other countries will have the fortitude, power or will to maintain the status of a nation of laws instead of men. I hope so. We are all depending upon the Judges and Juries of our system to set things right. We are all hoping that the anger gets channeled through the system instead of against it. But current scenarios are playing out the other way.

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