Matt Taibbi on Government Corruption

As a forecaster, you must be willing to alter your predictions according to changing circumstances. I haven’t really altered my forecasts because our politicians have, unfortunately, behaved just as I thought they would. In other words, they have been corrupt, inept, self-serving, and positively braindead.

The most repugnant aspect of this entire financial crisis is the lack of prosecution. We experienced one of the largest economic collapses in American history where financial institutions fleeced average Americans, and yet there is no prosecution. Not only that, but these institutions actually got taxpayer money. Wow, how is this even remotely possible? As an American citizen, of course I’m flabbergasted and slightly perturbed by how things ended up. But as an economic forecaster and investor, I am unemotional and I just synthesize this information. And what does this information reflect? Corruption and the collapse of the rule of law. And what does an investor do in such a situation? Buy private assets, and more specifically, gold.

When Obama was elected, I knew a lot of people who thought he was actually different. I argued that Goldman Sachs was the largest contributor to Obama’s campaign and not to expect any change on that front. It’s amazing, but there are still people who support Obama even after he has broken promise after promise and showed he is no different from past Presidents. What we are witnessing is a clear unholy relationship between Wall Street and politicians. Until this relationship is severed, don’t expect solutions to our structural problems.

If the gold trade were merely about inflation, I would not be as confident recommending it. But since gold is an anti-government trade, I have the utmost confidence gold will skyrocket in the years ahead. Let’s think for a second if the anti-government trade is right. The government can’t balance its budget and spends money on wars while 14% of Americans are on food stamps. The government also buys its own Treasuries because of a lack of demand and brings down interest rates right when the largest demographic in America needs fixed income. To add to the folly, the government continues to send money to banks, who hoard it, instead of giving it directly to Americans. This is stupidity on a grand scale. Trust me, I don’t lose any sleep at night effectively being short the government.

Anyway, take some time to watch the video below. Matt Taibbi has been a journalistic voice in the wilderness commenting about the massive corruption in Wall Street. His is a voice that needs to be heard.

Matt Taibbi on Government Corruption is a post from: Expected Returns

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