How the Federal Reserve and allied central bankers wrote the obituary for competitive capitalism

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Nomi Prins. Photo credit: by Dean Zatkowsky

Rising from a world of deep financial sin at Goldman Sachs, where she served as a managing director during the creation of the housing Ponzi scheme that wrecked much of the world’s economy, Dr. Nomi Prins, has written seven books detailing the corruptions of the financial elite that has only intensified its destructive assault on the livelihood of the world’s struggling population.

In her latest book, “Permanent Distortion: How the Financial Markets Abandoned the Real Economy Forever,” Nomi writes the ultimate obituary for the competitive capitalism celebrated by classical economists since Adam Smith. This is the evil doppelgänger distortion bereft of any saving grace accountability of a free market conceived by the evil alchemists of the world’s uber powerful central banks led by our own Federal Reserve at the top of a unipolar world of their creation. It is a concentration of governmental power in alliance with the super-rich of the west determined to cut off any “invisible hand” of market forces being it from workers striking for higher wages or competition from smaller producers. The only hand at play is the one using unchallenged government power to prop up the most voracious of the rich.

From the housing crisis to the pandemic, all disasters are an opportunity for plunder of the vulnerable. As Prins writes: “The world’s 10 richest men more than doubled their fortunes from $700 billion to $1.5 trillion at a rate of $15,000 per second, or $1.3 billion a day during the first two years of a pandemic that has seen the incomes of 99% of humanity fall and over 160 million more people forced into poverty.” She adds a quote from Oxfam International executive director Gabriela Bucher that "if these 10 men were to lose 99.99% of their wealth tomorrow, they would still be richer than 99% of all the people on this planet."

Meanwhile, Prins tells Scheer: The Fed has been raising interest rates in a very accelerated way. Why? Ostensibly, to fight inflation, which mostly it can't control oil and food type prices. What it can control is the cost to real people of borrowing. That cost has now increased or doubled since March for actual real people who don't have access to tons of cheap money to, for example, afford mortgages, which is one of the reasons they're staying in rents, which is one of the reason the rents are going so high. So, all of these incidents, whether it's the Fed inflating markets by inflating its balance sheet, or it keeps its balance sheet as high as it was, but it increases rates to tighten the availability of money for real people, ultimately still helps the markets relative to the real economy. Right now, it's happening in real time. I believe the Fed's going to ultimately inflate its balance sheet again when the economy gets bad enough or Wall Street more particularly asks for more help, which it will, because its loans are starting to deteriorate again because people cannot afford to pay these rates. But in the meantime, we are in the middle of this permanently distorted environment.



Joshua Scheer