news.goldseek.com / By Gordon T Long / December 28, 2012
MACRO ANALYTICS – December 2012
We have a Crisis of Trust in America and it has become so pervasive that it is paralyzing America’s natural inclination towards risk taking and innovation. This Crisis in Trust is a direct result of Monetary Malpractice and the Moral Malady which it has inflicted on America.
CRISIS OF TRUST
Some would argue that the lack of growth and jobs has created a sense of uncertainty in America which has manifested into historically low levels of confidence and sentiment. I would argue the cause is a crumbling foundation of trust and the cause and effect the opposite.
It is a Crisis of Trust which is the foundation for confidence and sentiment levels in a nation. Trust fosters certainty and a sense of security. Uncertainty is the death knell for business investment and finance.Todays plummeting capital investment in America means slower growth and an even tougher job market lay ahead. So where does a Crisis of Trust stem from and why do we suddenly have one?
The dot.com bubble and its subsequent implosion in 2000 unnerved our society with a sense that something wasn’t right. People couldn’t quite put their finger on it but there was simply too much money everywhere for any “half baked” dotcom idea and the daily IPO lotteries showed that greed was running wild. The Fed Chairman “Maestro” Alan Greenspan did nothing during the era of “Irrational Exhuberance”. It was extremely unsettling to the general public but when it imploded and executives from Enron. Worldcom, Tyco and others were publically paraded off to prison, some level of trust was restored, but perceptions and confidence were weakened. Similar to previous financial debacles, like the S&L crisis of the 90′s, highly visible penalties were metered out. it was obvious to all during the trials that the Fed had allowed much of this explosion to occur by not curtailing the unpoliced and out of control securitization industry, through tighter banking restrictions and not impeding the CFTC.
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