VANCOUVER ( Bullions Bull Canada) -- It was encouraging to see a recent article in the New York Times arguing for the necessity of smashing the Big Bank Oligopoly in the U.S.
Apparently not everyone has forgotten the basic fundamentals of economics. Going all the way back to Adam Smith economic theorists have acknowledged a central premise of capitalism: Oligopolies are predatory, parasitic abominations that can never be allowed to evolve in our economies. Or, as I put more succinctly in a recent commentary , "too big to fail = too big to exist." This premise is so self-evident it should not even require elaboration. Yet, the fact these Vampire Banks not only exist but continue to grow shows this simple truth is still not grasped by more than a small fraction of the population. What is "too big to fail?" It is a group of banks saying to the U.S. government (and governments across the West): "We're so important that you must save us...or else." This is extortion. It cost U.S. taxpayers somewhere in the neighborhood of $15 trillion in assorted hand-outs, 0% "loans" and "guarantees" when Wall Street made its extortion demands in 2008. Since that time the U.S. economy is much weaker, much more debt-leveraged (i.e. insolvent ) and the Wall Street vampires have been allowed to get even bigger. The result? Serial extortion in the form of the latest quantitative easing from the Federal Reserve: $500 billion per year in blackmail payments, ad infinitum. Incredibly, the sheep still don't understand even this bankster crime of theft-in-broad-daylight, so perhaps a simple example will illustrate it. Seven castaways are stranded on a desert isle. Even though they only have one "good" to purchase in their economy -- coconuts -- one of the castaways happened to bring along a printing press. They decide to have their own money. Ten coconut dollars are printed for each castaway per month. Then one month one of the castaways -- let's call him Gilligan -- gets a brilliant idea on how they can all get rich: print more money. Instead of printing only 10 coconut dollars per castaway each month they would print 1,000 coconut dollars. So even if they never got rescued, they would soon all be "rich."
Lacking any Professor to explain the folly of Gilligan's plan, they all agree. However, what the castaways quickly discover is none of them are getting any wealthier at all. With their tiny island economy flooded with coconut dollars, all that has happened is prices also increased. Now let's change our scenario slightly and introduce a new castaway: Banker. Banker happens to be the owner of the printing press and Banker gets a different idea for "getting wealthy." With complete control over the printing press, Banker decides that from now on while each of the other castaways will continue to get 10 coconut dollars each month he will receive 1,000 coconut dollars from his own printing press. Suddenly the dynamics change dramatically. Instead of no one getting any wealthier as price increases match the increase in the money supply Banker becomes wealthier as he accrues a massive supply of coconut dollars. So even though the price of coconuts is soaring, only Banker is unaffected by the price increases. Note that Banker can only get richer through this money-printing inequity at the expense of all the other castaways getting poorer. This is the Western financial paradigm: Banker(s) gets all the coconut dollars. We all get poorer while their own endless supply of new paper ensures that "inflation" only affects the rest of us. The absurd lie is that handing Wall Street endless trillions of newly created money will somehow "create jobs." After all the $trillions printed and handed to Wall Street since 2008, does anyone see any jobs being created? This is only one of the mega-crimes of these mega-predators. Here are two more. The banksters' $1.5 quadrillion "derivatives market" is nothing but a rigged casino, so crooked that "the House" won't even pay off on its losing bets if it's not convenient for them - as we saw with their refusal to make payment on credit default swap contracts, following the Greek debt-default. Then there is the banksters' $500+ trillion Libor fraud . Despite the fact this fraud has (almost) been completely exposed, the vampire banks have so much power over our governments they continue to operate this scam with impunity. Nowhere here do we see any evidence of "too big to fail" - i.e., a need for the continued existence of these financial predators - while everywhere we see evidence that they are, indeed, "too big to exist."
However, there is a much broader point to be made here. The banking oligopoly is only one form of this economic cancer that has ravaged the global economy in general, and Western economies in particular. The multi-billion oligarchs have been permitted by our governments to divide and plunder most of the global economy with oligopolies in virtually every nook and cranny of our societies. Yes, the big banks must be smashed, reduced to a tiny fraction of their current size, and never permitted to swell to such a predatory/parasitic size ever again. But what must be understood is that all of these oligopolies extort money from our societies in one way or another. While the handouts to the Wall Street vampires have been the largest and most visible form of corporate welfare/extortion, corporate "subsidies" across the West now amount to $trillions per year in one form or another, and continue to grow. Cancer comes in many forms, yet there is broad consensus of the need to eradicate all forms of this disease. Oligopolies and monopolies also come in many forms, and it is equally imperative that we develop a consensus on the need to eradicate this "disease." This article was written by an independent contributor, separate from TheStreet's regular news coverage.Follow @bullionbulls