Government Sachs

BALTIMORE – Two things. One we understand. The other we don’t. First, you gotta hand it to Wall Street. The financial elite were 1,000% behind Hillary. Then, when Donald Trump won the White House, within minutes, they were in his cabinet.


And then they saw the sign, and it looked like a winner’s sign. And so they embraced the orange interloper without further ado…


During the campaign, not only were they loading Hillary up with millions of dollars in funding, but they also regularly predicted doom if “The Donald” were to win. Then, apparently within seconds, in the middle of the night, they saw a great dollar sign in the sky…

“By this sign will you conquer” was written upon it. Not since the conversion of Constantine has a turnaround been so abrupt and so complete. Mirabile dictu!

In a flash, the analysts at the nation’s top Wall Street firm suddenly realized something that had eluded them throughout the long and bitter presidential campaign: Tax cuts and spending increases might not be so bad after all!

The great sell-off ended. A buying spree took over… pushing up the price of Goldman Sachs stock by 40% and making its CEO, Lloyd Blankfein, the No. 1 beneficiary of the election (since the election, the value of his Goldman holdings have increased by $163 million).


Yes, you have seen it before… the perpetually grinning (with good reason) chairman of GS. As Lead Zeppel prophesied some time ago already: And a new day will dawn, for those who went long, and Wall Street will echo with laughter – click to enlarge.


Now the Goldman boys are in practically every important office – Mnuchin in the Treasury, Cohn at the National Economic Council, Clayton (a lawyer who has represented Goldman for years) at the SEC, and Bannon and Scaramucci, also from the Goldman litter, ready to do what is asked…

Henceforth, they will think no more about what is good for Goldman, the Street, and themselves. Now, they are public servants – with only the welfare and happiness of others to worry about.


Filling Jefferson’s Boots

That’s what we love about democracy: It has the power to transform people as they rise to the challenges of public office. People we considered lowlife hustlers and two-bit pols are suddenly elevated.

Their feet grow to fill Jefferson’s boots…  their heads expand to wear Adams’ hat… and, well, sometimes they can even wear Taft’s pants.


Well, here they are: Thomas Jefferson’s boots. Apparently they are still standing around in his bedroom at Monticello.

Photo credit:


Seriously, what we admire so much about Goldman is that it is honest. We know what the Goldman bunch is up to: It is looking out for No. 1. You remember Italian economist and sociologist Vilfredo Pareto?

As we reported here (see also here and here), Pareto explained that no matter what you call your government, it will be run by a few sharp people – whom he called “foxes.” They figure out how to get control of the political infrastructure and make it work for them. Goldman is one foxy organization; it wasted no time moving into the D.C. chicken house.


Foxiest of the Foxy

But what is really surprising is what is going on in the “security” industry. Spooks are the foxiest of the foxy – and the deepest part of the Deep State. Since the end of World War II, they’ve managed to scare trillions of dollars out of the taxpayers, even though the U.S. has not faced a worthy adversary at least since 1989, and even though almost all their “intelligence” is either trivial or wrong.

From the bungled Bay of Pigs Invasion to the fall of the Soviet Union (which Stansfield Turner, who led the CIA from 1977 to 1981, admitted that the agency “missed by a mile”), U.S. intelligence services have been out to lunch.


The CIA has often turned out to be completely clueless – this became e.g. evident after the collapse of the Soviet Union. Similar to a few famous Keynesian economists, the agency didn’t have the foggiest idea how weak the Soviet Empire had become. Maybe they should have read what Mises wrote about the socialist calculation problem. They are reportedly good at some things though – just not the ones they are supposed to be good at.

Cartoon by Herblock


More recently, it was the CIA that dutifully fed the neo-cons the phony weapons-of-mass-destruction story they wanted to hear, resulting in a war that has so far cost $7 trillion.

And in the latest brouhaha over Russian interference in the U.S. election, apparently the key “intelligence” came from watching the Russia Today international television network (on which your editor is interviewed from time to time).


Intelligence gathering operations. We’ve noticed that not knowing anything does not stand in the way of reporting on it. In this context, the most recent beclowning over imaginary Russian hackers and the “leaked dossier” describing Trump’s Russian adventures really takes the cake. Even the WMD fairy tales of yore looked more credible.

Cartoon by Daryl Cagle


Clownish “Intelligence”

America’s spooks may or may not be very good at supplying useful intelligence, but they are definitely good at manipulating the system to stay in their cushy positions of power and money.

Director of National Intelligence James Clapper clearly lied to Congress when he said the NSA wasn’t collecting information on U.S. citizens, yet he continues to draw full pay. Former acting Director of the CIA Mike Morell claimed Trump was an “unwitting” Russian agent, whatever that means. CIA Director John Brennan lied about collateral deaths from drone strikes (he claimed there were none).

And Morell’s predecessor, David Petraeus, delivered state secrets to his biographer, with whom he was having an adulterous affair, then lied to the FBI about it. He got nothing more than a slap on the wrist.

Time and again, incompetence and criminality in the “security” industry are overlooked and forgiven. And still, there are no fewer than 17 intelligence agencies in the U.S., with thousands of snoops, analysts, and informants paid largely out of classified budgets.

At a cost to taxpayers of billions of dollars a year, they spy on us, foreigners, and each other. Why, then, would they pick fights with the new president over clownish “intelligence” reports?


Preview of the next dossier: evidence that Trump and Putin somehow got to Supergirl!

Image credit: DC Comics


If we’re right – and the main goal of the Deep State is to shift power and money from the rest of society to itself – what purpose is served by annoying the new commander in chief?  We don’t know. Mistake? Miscalculation? Something doesn’t add up.


Chart by: StockCharts


Chart and image captions by PT


The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.




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