For this cartoon, our cast of characters include:
Road Runner (Goldus Fixicus)
Wile E. Coyote (Jane-us and Josephus Six-Packus) Genus: Leftus Holdeming, Species: the Bagus
A Great Disconnect at the Hairpin Curve?
So just what has been the cost of the gold price-rigging regime brought upon us by Road Runners Rubin, Greenspan and Summers anyway? I mean, how exactly do you quantify it? I'm going to go 'out on a limb' so to speak to surmise that our collective Wile E. Coyote moment, around a hairpin corner at 125 miles per hour, is fast approaching. For those who might be unfamiliar with Wile E. Coyote - he is the arch nemesis of the Road Runner of Warner Brothers' Looney Tunes fame. 'The last laugh is on Mr. Wile E. Coyote,' in the eventual end!
Do we take the "official amount" of gold that Central Banks collectively claim to have in their vaults and multiply it by a finite number? Perhaps we should subtract from the former number the amount of gold GATA figures the Central Banks have left on hand prior to doing our multiplication? After all, Central Banks are sure to get increased value for their remaining gold stocks, once the global investment community wakes up to the fact that their vaulted stocks are likely half of what official sources claim.
Insider Trading for Fun and Profits, While Shearing the Sheep - New Ideas for Living!
Another idea might be to measure the returns that have collectively accrued to the Bullion Banks' bottom lines over the past ten years or so? They have all worked so hard and diligently in their complicity to help the Fed and U.S. Treasury to rig the price of gold - and everyone knows that good help doesn't come cheap.A corollary to this might be to guesstimate the amount of nefarious profits that might have been garnered as a result of the inner workings of the rigging scam? After all, it is well known by even the most uneducated that activities such as 'insider trading' can yield huge benefits to the perpetrators. If you don't believe me, ask Martha Stewart.
Ahhh, the Martha Stewart thing -- how about the value of avoiding a lengthy stay in the 'slammer'?-- if as, and when, the perpetrators are nabbed or get caught? Then again, perhaps it's not so much the lie itself, but more to do with whom you tell it to? It's apparently quite alright to lie to a grand jury and the American Sheeple, but a completely different ball of wax when one fibs to ACME Products, the SEC, or securities regulators. I guess there really is nothing more sacred than the equity markets in the good old U.S. of A. What is even a few nights in the slammer with some house arrest tacked on to the end really worth to a guy with a thick wallet or a big fat bank account? Then again, who's to say? Perhaps a good old-fashioned tarring and feathering might be more appropriate for this lot?
Hear No Evil, Speak No Evil, See No Evil, and Have No Fun!
We may choose to measure the costs of failed policy in terms of 'monkey see, monkey do'. Where I come from, folks generally tend to learn from leaders. These leaders and their fraudulent price fixing ways have certainly taught a new generation of business mavens the ropes of impropriety, all the while escaping culpability for their ill gotten gains. So far this year in the United States of America, no fewer than 14 companies have made cash settlements with regulators [ACME, SEC, NY AG Spitzer's office] in amounts exceeding $30,000,000 each. No less than an additional 5 companies paid fines exceeding $100,000,000 each. In not one of these aforementioned cases did the payee admit one ounce of guilt! Chump change for a hand slap, isn't it!??? Good students they are, indeed in the game of 'monkey business as usual.'
Empirical Monetary Wizardry & the Grand Poobahs' "Beep Beep!" or Just Fire in the Hole?
How does one go about measuring the costs associated with the masking of empirical inflation and the denial that inflationary pressures [incredulous even with $50 dollar [Federal Reserve Note oil]] are present in the economy? One day I hope that our esteemed Federal Re$erve Governors have the opportunity to candidly and collectively answer this question.
Perhaps the price should be measured more personally in terms of the accolades heaped upon the fine feathered Rubin [of Citibank], Summers (Führer of Harvard), and Greenspan [of Maestro fame]? Praise like this is hard to buy - even if you are using/abusing the nation's good name, credibility, and good credit to do so - Beep, Beep!
Daunting Cost Accounting Behind the Gold Rigging or the Dislocation of Outsourcing?
What about the costs associated [inflicted upon other sovereign nations] for having the U.S. dollar appear "strong" whilst the perpetrators have been systematically debasing the world's reserve currency [and hence everyone else's] all along? How about the human suffering that accompanies a depressed or worthless currency? While that number is a little bit difficult to 'get your head around', suffice to say it's a very, very big number. Tabulating a number this large would involve multi-national calculations involving trade numbers going back at least ten or so years in countless countries' trade figures all around the world. Measuring the debacle in these terms is a little more than a 'daunting task' if I do say so myself.
Some might even choose to attribute the costs of the scourge of outsourcing jobs to this flawed pursuit. After all, an unnaturally strong dollar has given rise to conditions where domestic industries could not economically compete with already lower wage/living standard jurisdictions like China/India. This is not to say outsourcing would not have occurred at all, but rather, the pace or rate of change might have been materially altered so as to 'ease' the resulting dislocation and transition.
The Great Disconnect - Heavy Metal and Real Estate
In the end, I wonder if we might begin considering the damage that the accompanying larceny of forced and arguably unnaturally low interest rates and collateral damage caused in the realty markets [from rigging free markets]? After all, the aforementioned economic maladies have without a doubt given rise to excesses in both realty as well as reality, in both macro and micro contexts. I would contend that the sanctity of the family home has long been held as the penultimate symbol or nucleus of the 'family unit' - and a basis for manipulation of heavy metal music and currency debasement. I would even contend it's the glue that binds what counts most in life. How do we put a finite price or a measure of value on the debasement of these institutions? Measuring the carnage brought on by failed policies like this takes on new meaning when the barometer includes a scale other than "shareholders or bondholders equity" [shareholder value] as is the case with the GSEs, namely Freddie, Ginnie, and Fannie.
When interest rates ultimately normalize and rise, as they surely must do, and when falling real estate values ultimately hit Jane and Joe Six-Pack between the eyes like a speeding bus, I cannot help but wonder out loud who will get the last laugh? -- and whether Road Runners Greenspan, Rubin or Summers will still be sitting in the driver's seat? Beep Beep!
A special thanks to Mary Puplava at FinancialSense.com for use of the images.