Once Upon A Banking Ponzi

The toxic effects of the Fed’s relentless interest rate repression are legion, but among the worst has been the absolute savaging of bank depositors. Worse still, the resulting vast transfer of income from depositors to banks has resulted in an egregious, artificial ballooning of bank profits and stock prices.

For instance, the combined market cap of the top six US banking institution—JP Morgan, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs—has risen from $200 billion at the bottom of the financial crisis during the winter of 2008-2009, where it reflected their true value absent government bailouts, to $1.5 trillion currently. That 7.5X gain, which was 100% orchestrated by the Fed, is an unspeakable gift to the wealthy who own most of the stocks and especially to top bank executives who have cashed-in on vastly appreciated options.



Already a subscriber?

Login below!