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Note To Sanders: Forget The Octopus Arms...Go For The Head

1/5/2016

 
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By Chris Rossini

Bernie Sanders is attacking Wall Street. He's campaigning to break up the "too big to fail" banks. It's easy to see why such an idea would get some fanfare. After all, there are many Americans that remember the great $700 billion heist during the George W. Bush administration...the one that bailed out the most-favored banking cronies.

Sanders says: "We need a movement which tells Wall Street that when a bank is too big to fail, it is too big to exist."

Again, superficially, it makes sense as to why people would hitch their wagons onto such an idea. Sadly though, Sanders is taking a swing that can only end up as a major whiff.

The American banking system is like an octopus. The head of the octopus is the central bank, known as The Federal Reserve. That is where the source of our problems originate. It all starts and ends with The Fed. The banks are nothing but appendages. They're like the Fed's octopus arms.

Sanders wants to attack the arms. That's a poor strategy, and the results would be fruitless.

The size of a bank doesn't matter. In fact, how does Sanders know what the "right" size would be? At what point is a bank no longer "too big"? How can he know such a thing? The truth is, he can't, and like most government decisions, such a move would be totally arbitrary.

Even if Sanders were to succeed in breaking up the big banks, were the Federal Reserve to still exist, those new banks would retain their "lender of last resort". The banks would still operate in an environment drowning in moral hazard. They would still have a call option on our purchasing power and would continue to loot us via inflation. They would still be The Fed's instruments in creating the illusionary booms that are followed by the bone-crushing busts.

That's why they call it The Federal Reserve "System".

It's a "system" of enriching the few at the expense of the many.

Sanders isn't going to touch the "system". In fact, with all the free stuff and new "rights" that he's concocted, Bernie's going to need The Federal Reserve around to finance them.


Bottom line? Tangling with the Fed's octopus arms would accomplish virtually nothing. The only change that must occur is to End The Fed. The Eccles Building needs to be turned into a museum where future generations can walk through and learn about one of the biggest mistakes that was ever made in America.

Will Sanders call for an end to The Fed?

Don't count on it.


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