BOTTOM LINE: In the last 20 years Wall Street has moved away from an investment-led model, to a gambling-led model.
If you broke your trading book doubling or quadrupling down on derivatives and are sitting on top of a colossal mark-to-market loss, why not have the Fed step in and take it off your hands at a price floor in exchange for newly “printed” digital currency? That’s what the 2008 bailouts did.
Only one problem: eventually, this approach will destroy the currency. Would you want your wealth stored in dollars that Bernanke can just duplicate and pony up to the latest TBTF Martingale catastrophe artist? I thought not: that’s one reason why Eurasian creditor nations are all quickly and purposefully going about ditching the dollar for bilateral trade.
The bottom line for Wall Street is that either the bailouts will stop and anyone practising this crazy behaviour will end up bust — ending the moral hazard of adrenaline junkie coke-and-hookers traders and 21-year-old PhD-wielding quants playing the Martingale game risk free thanks to the Fed — or the Fed will destroy the currency. I don’t know how long that will take, but the fact that the dollar is effectively no longer the global reserve currency says everything I need to know about where we are going.
Don’t the Soros globalists/NWOs want to destroy the US dollar? I thought they wanted to eliminate the dollar so they can control the supply of money in America. Anyone hoarding cash for the coming collapse will be sitting on paper that’s worth about as much as confederate dollars were worth. That’s why people have been investing in guns, ammo, food stocks and of course, gold and silver.