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Is Capitalism the culprit?Asif Punjwani March 12th, 2012

Capitalism is an Economic model in which every individual

acts according to his own interest, and the market forces

collectively achieve collective goals. If more people feel

Automobiles fit their need compared to a motorbike, the

markets will start to respond accordingly. There involves

no central planning other than public projects like

Water/Sewer/Road Projects. Capitalism unitizes capital

and labor via sound money. Money provides the

signaling mechanism of the availability of goods/services

via incentives at a given time in the economy. For e.g. It

may be cheaper to fly to get to a city than drive. Falling

CnG prices due to oversupply gives consumers the

incentive to consume CnG instead of Petrol. Money carries within itself all the collective signalsfrom individuals participating in the economy. It is this characteristic of money that makes it

sacred in Capitalism.

Capitalism isnt a new idea. It has been around for the last 5000 years where Gold, Silver,

Copper, Salt and otherscarce commodities were used as money. It is Banking and its

Fractional Reserve Lending that came about in the last 400 years. What we have today is a

sickening version of Capitalism where money is debt, profits are projected, investments are

leveraged, Governments are monetized, International trades are subsidized and the losses are

socialized. In a free market, everyone has as much of a right to succeed as much as they have

a right to fail. Today, its laissez-faire till a banker get a margin call!

What we perceive as money today is not money but debt issued either by the Central Banks to

finance Government Budget Deficits or by Commercial Banks to finance Private and Public

Investments. During Economic bubbles, banks issue plenty of money causing economic signals

and incentives to go haywire. The Banks and Governments play this Economic Tango with

Deficit-financing and loan guaranties for Commercial lending (Fannie& Freddie) while trampling

on the rights of individuals participating in the economy. Banks have financialized Education and

Housing in US with Government backing, thereby raises cost. Government has financialized

healthcare and retirement via Medicare/Medicaid and Social Security respectively.

The Financial Crisis of 2008 wasn't the failure of the Oil Industry, the Auto Industry, the AirlineIndustry, the Agriculture Industry, the Textile Industry or any Industry that actually produces

goodol honest-to-God goods that we use every day. It was the failure of Mortgage Bankers who

issued NINJA (No income no job/assets), Liar-loans, No-Doc and Alt-A loans which we know as

Subprime loans today. It was the moral failure of property appraisers. It was the failure of the

rating agencies and their blind rage to increase their market-cap by rating everything under the

Sun as Triple-A. It was the failure of SEC and the FED to enforce the laws. Even theFBI saw

the mortgage fraud brewing as early as 2004. AIG was label as ENRON back in 2005. Afterall

http://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/http://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/http://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/http://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAWhttp://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAWhttp://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAWhttp://www.csmonitor.com/2005/0401/p03s01-usju.htmlhttp://www.csmonitor.com/2005/0401/p03s01-usju.htmlhttp://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/http://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/http://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/http://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/http://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/http://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAWhttp://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAWhttp://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAWhttp://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAWhttp://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fraud-mortgage-industry-s-l-crisis?_s=PM:LAWhttp://www.csmonitor.com/2005/0401/p03s01-usju.htmlhttp://www.csmonitor.com/2005/0401/p03s01-usju.htmlhttp://www.csmonitor.com/2005/0401/p03s01-usju.htmlhttp://www.csmonitor.com/2005/0401/p03s01-usju.htmlhttp://www.judicialwatch.org/press-room/press-releases/jw-uncovers-documents-treasury-related-government-brokered-acquisition-bear-stearns-jp/

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Citibank testified under oath that 80% of their MBS loans were defective in 2007. The SEC and

FED sat and enjoyed the music. Lets not blame the VAR(value at risk) numbers when the initial

due-diligence was missing before the loans were issued. And when the music stopped, this

funny money was supposed to bring a shrewd justice to these institutions. This funny poison

called Financial instruments (CDO2 ,Interest-rate Swaps, naked CDS & puts) were all rescued

by real debt issued by the Central Banks to the Governments. The World will continue to pay ahuge price for these bailouts via Inflation, vanished savings/pensions and slow economic

growth.

Free-markets gave us the Industrial revolution, the light bulb, the Microprocessor, mobile

phones, television, eBook Readers and automobiles, all at affordable prices. This is proof that

free-markets work. But it will fail if fraud is not punished and sanctity of money is not protected.

Government - the prosecutor of fraud and protector of money, itself is the culprit here. It

delegated its sovereign right to issue money to the Banks. Fraud is fraud unless you are a

Banker or ifyou stole from the Bankers (Madoff). A world where downloading illegal music could

land you in prison for years but wrecking up the global economy wouldcost you less than 1% of

your market cap. Not only does Goldman Sachs own the World but also its future generations.

Its up to the free citizens of the world to refuse their paper currencies and bank checks in return

for their fruits of labor or face eternal damnation of financial slavery.

Asif Punjwani trades equities, bonds and derivatives in the International Capital Markets.

He can be reached via Twitter @AsifAmeer_AP

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