Soon Fed Chairman Ben Bernanke will be forced to raise interest rates, confirming Ned Davis Research’s February forecast of an S&P 500 mid-year peak. Yes, “the midyear peak could mark the end of the cyclical bull market that began in March 2009 and the start of a new cyclical bear market,” chipping away at the 50% returns stockholders are praying would continue for two more years. Sorry, game over.
Worse, today’s wealth-income gap is soaring at levels not seen since the days before the 1929 Crash. Reasonable minds outside the political bubble are quietly praying for new leadership before the inevitable happens, before America’s bumbling political and financial leaders trigger the Mother of all Meltdowns and Depressions.
Yes, I’m talking about stopping the damage inflicted on America by the Bernanke Money Printing Company … by Treasury Secretary Timothy Geithner and his ol’ buddies in the too-greedy-to-fail Wall Street banks … by the 261,000 lobbyists creating a Soulless Anarchy of the Super Rich.
Yes, they’re all leveraging a self-destructive Reaganomics ideology that’s tearing down a few centuries of capitalism in one generation. America needs new leaders who can reset our moral compass, stop the destruction.
Who? Who can change our course before incompetence, greed and ideology crashes the U.S.S. Titanic again? There is one strong voice out there that tells it like it is, knows how we got here, can keep America from hitting that iceberg, repeating the 1929 Crash, triggering another long Great Depression.
This new leader: Pimco’s Bill Gross. He’s already a proven leader and statesman as head of a $1.2 trillion global financial institution. And in his recent “Devil’s Bargain” he clearly sees that “money has become the economic and political wedge for profound changes in American society.” For the worse.
Here’s how we’d paraphrase his “Devil’s Bargain” message. Imagine him in front of the Reagan Library announcing a much-needed new economic direction for America. Yes, he’d make a great president. Yes, he’d be perfect as a new Treasury Secretary, now. Then later, Bill Gross would be the next great Federal Reserve Chairman, in a clearly historic move that would rival the appointment of Paul Volcker back in 1979. Listen:
Our financial system is destroying us from within, stop it now
For more that two centuries, money has been the backbone of a healthy economy. Way back in 1966 Gross memorized this definition of “money” from an economic textbook: “A medium of exchange and a store of value,’ it said” … but “it failed miserably.”
He warns that it also failed to see “the increasingly dominant function that money was to assume in a finance-oriented, capitalistic system: Money can be used to make money.” In today’s world, money magically grows more money. Money rules the political process, writing favorable laws to increase power. Money creates clever new ways to relentlessly shift more and more money from taxpayers to big banks and the Super Rich. Gross warns: America has made a “bargain with the devil.”
Back in 1966 economists also did not see “the half century of financial ‘innovation’ that was ahead and how money and its leveraging was to be the foundation for much of America’s prosperity.” Something happened … after two centuries of building a healthy economy, the paradigm shifted … capitalism began morphing into a dark saboteur … “Money has become the economic and political wedge for profound changes in American society.” Gross captures the shift in simple examples.
”Fifty years ago, the highest paid and most prestigious professions were that of a doctor or a 707 airline pilot who flew the ‘golden’ route from Los Angeles to Honolulu. Today the yellow brick road begins on Wall Street,” and stays there. “Aside from supernova innovators such as Steve Jobs or Mark Zuckerberg, money is made from securitizing ‘things’ instead of booting and rebuilding America.”
Look around at how money has distorted America: “The tallest buildings in almost every major city are banks, with tens of thousands of people shuffling and trading paper for a living. One of this country’s premier investment banks paid each of its 26,000 employees and an average of $370,000 in 2010, nearly ten times the take-home pay of other American workers. Almost a quarter of the 400 wealthiest people on Forbes annual richest list make their money from money, whereas only 8% could make that claim in its first issue in 1982.”
Wall Street ‘money’ is at the core of America’s deteriorating economy
Gross is one of a growing new breed of insiders who see that the path America’s on is destroying us from within: our economy, democracy, our very soul: “I know one thing for sure: This is not God’s work — it has the unmistakable odor of Mammon,” the financial community has “failed miserably at our primary function, the efficient and productive allocation of capital.” Rating agencies failed us. Bankers make bad loans to book fees. And “active money managers underperform the market 80% of the time.”
Source http://www.marketwatch.com/
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