Wolf Rayet bubble large The Biggest Bubble In History: Fraud Bursting Gas Bubble 60 Light Years Across. Courtesy of ESA

Forget the Housing, Bond or Derivatives Bubbles … Fraud Is the Biggest Bubble of All Time

The housing bubble which burst in 2007 or so was the biggest bubble of all time.

Many argue that the bubble in U.S. bonds has surpassed the housing bubble as the largest ever.

Of course, given that the derivatives market is more than a thousand trillion dollars, and that is is backed by thousands of times less collateral, a good case can be made for arguing that derivatives are the biggest bubble.

But if you really think about it, the largest bubble in history is fraud, because it includes all of the above and more.

Specifically, the housing crisis was caused by fraud.  The government encouraged fraud, and helped cover it up.

Huge swaths of the derivatives market are manipulated by fraud.  See this, this, this and this. But instead of cracking down on the fraud, the government is backing it.

And the bubble in bonds was caused by super-low interest rates.  See this, this and this.

Low interest rates – in turn – are caused by the government’s zero interest rate policy and quantitative easing.

And how did the government sell these programs? By saying that they were necessary to help the economy and create more jobs.

But in reality, zero interest rate policy is just another stealth bailout for the big banks.  And quantitative easing only helps the super-elite … and hurt the economy and the little guy (Bernanke knew back in 1988 that QE doesn’t work for its advertised purposes.)

In other words, the government’s low interest rate policies were based upon a fundamental misrepresentation as to their purpose and probable effect.

Indeed, experts say that all bubbles are enabled by fraud.

But there are signs that the fraud bubble is collapsing.

Trust is falling to all-time lows as to many government and private institutions.  Why?  Because institutional corruption is so rampant that it is becoming obvious to everyone from Joe Sixpack to amateur and sophisticated professional investors.

While liberals tend to distrust big corporations and conservatives tend to distrust the federal government, we all agree that the malignant, symbiotic relationship between the two is the root problem.  Indeed, when government and corporatism merge, it is hard for anyone to trust what is going on.

When government officials are as corrupt as the criminal enterprises they are suppose to regulate, even the mainstream media can’t ignore it any longer.

And the people lose all trust in the system.

No matter how hard the boys work to cover up their ongoing misdeeds, the fraud bubble may finally be popping …

See examples of a popping fraud bubble here, here and here.

Category: Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Fraud Is The Biggest Bubble In History”

  1. denim says:

    And when the denizens of government fail and substitute collusion and compromise for righteousness, there is ancient wisdom

  2. jd351 says:

    Great Monday morning read!!!!

    “While liberals tend to distrust big corporations and conservatives tend to distrust the federal government, we all agree that the malignant, symbiotic relationship between the two is the root problem. Indeed, when government and corporatism merge, it is hard for anyone to trust what is going on.”

    I am not so sure of this one… There are so many people who still have their head in the sand . It’s still he said, she said argument depending on your political view point.

  3. Greg0658 says:

    since this post seems directed at my dualNovas meme momo (what is the def dif of those)
    I will comment (spill some bytes)

    I believe that what we have here is a failure to facilitate prosperous times for every living person, pet, corporation and banker.

    IMO that is not so bad.

    What we have next is proper allotments to dangerous, hard, tedious labors as well as brainy-ack labors.

    What we have after that is allowing proper population expansion of all them into a defined extraction closed loop planet. Meaning who should we really let vacation for their labors.

    In my 5+ years here at the TBP blog I have learned that this Titanic is not a ship – steerable by a Captain – it’s as complex as DNA and sub-molecules of the Universe interaction.

    That doesn’t mean I wish upon the planet and its inhabitants another wash rinse repeat of Civil and/or World War to create the DEMANDS that these paper machinification are attempting.

    A silver bullet for us to front run – nope – can’t do it with 1 voice.

    One Voice – Barry Manilow

  4. rd says:

    So the big question is:

    Did Mary Jo White get nominated to head the SEC because Obama is serious about attacking fraud in his second term or will all of her recommendations for prosection get put into the circular filing cabinet by Eric Holder?

  5. 873450 says:

    Government pretending bailouts are investments enables Wall Street to pretend socialism is capitalism.

    Government pretending acts of fraud are mistakes enables fraudsters to evade liability.

  6. Fred C Dobbs says:

    Washingtons is absolutely right: “the housing crisis was caused by fraud. The government encouraged fraud, and helped cover it up.” Why are the Senators so wealthy? Why did many get ‘sweetheart loans’ not offered to the public? Bi-Partisan Congress has turned the federal government against their electors and joined with members of the private sector to fleece the public. How else can the rich grow richer and the poor grow poorer? Why don’t they make our borders safe? Cheap illegal immigrant labor lowers wage costs and boosts business profits, and their stock profits. The lower wage rates reduce American labor living standards to the point native born Americans have to live like illegal immigrants. Why do they prop up the stock market when only the rich own significant portions of the market? Why does Bi-Partisan Congress turn its back on 99% of the public? Is this what democracy is all about?

  7. Greg0658 says:

    I didn’t present any one person strategies to hault(slow) the EE

    stop using credit
    don’t create children*
    be happy with less

    starve the empire yourself

    ya but that means this 1 life is devoid – sooooo

    * is that the GOP abortion reverse strategy? not my kid – theirs. really?
    * species A vs species B imbalance – ummmmm


  8. jadogsl says:

    2008 was not a financial crisis
    It was a moral crisis

    Only the emergence of a 3rd party changes things