Breaking the Cycle of Bank, Market and Other Economic Failures

A Dear John Letter to the Government

Dearest Government,

We need to talk.

Although I’ve been concerned about your handling of the economy for a while now, I view the recent bank collapses as the straw that broke the camel’s back.

While I appreciate the Treasury, Federal Reserve, and FDIC taking swift action to “strengthen public confidence” in the banking system, with all due respect, altering perception does nothing to solve the underlying problem. I’m sorry to inform you, but this is not a predicament that can be fixed with PR. The public doesn’t need confidence. It needs results.

The time has come for us to have an honest and open discussion as to what precipitated the biggest bank failures since 2008, and why these economic catastrophes keep happening - despite your endless legislative attempts to prevent them.

As much as I would like to believe that your intentions are noble and that these economic fiascos are just further examples of bureaucratic ineptitude, all of the evidence points to deliberate avoidance.

Look, I get it. Confronting problems is not easy. It is perhaps one of the greatest challenges of human existence. But, masking them never leads to a resolution. It only prolongs the inevitable.

For far too long you have been pinning these financial debacles on “fraud” while overlooking the true culprits: over-leverage and under-diversification. Using fraud as the scapegoat leads you to create unnecessary and costly legislation that ends up doing far more harm than good.

Do you remember how you responded to the 1929 stock market crash which was caused, not by fraud, but by an installment driven economy exacerbated by paltry stock margin rates?

I do.

You passed the Securities Act of 1933, which created the almighty Securities and Exchange Commission (SEC), led by a notorious lawbreaker and market manipulator. Instead of tasking your new taxpayer funded watchdog with fostering the diversification needed to insulate against market bubbles and crashes, you allowed it the power to enforce vague rules and restrict equitable access to capital.

Over the years, as your securities police failed to protect the public from some of the worst ponzi fraudsters of all time, you passed bill after bill - such as Sarbanes–Oxley and Dodd-Frank - that did nothing to preclude recessions, crashes, meltdowns or run-on-the-banks.

The reason for your ineffectiveness is simple. Your bills never address the root causes. They shield them. And your monetary and fiscal policies never tackle the actual problems. They exacerbate them.

I think it’s time for you to come clean and admit that you are secretly in love with over-leverage and the asset bubbles it fuels.

When they are forming, bubbles shield you from fiscal responsibility and enable you to keep kicking cans down the road. When the bubbles burst, you get high on their deflating air. Ruptured bubbles become your excuse to pass more power-grabbing legislation and to create more worthless agencies.

Don’t get me wrong. I am all for regulations that are fair and equitable and that foster innovation, independence and self-reliance. Unfortunately, your regulations serve as a deterrent to the freedoms bestowed upon us by the very Constitution that your spokespeople swore to uphold.

The people and I have had enough. We found an actual solution to the systemic over-leverage and under-diversification problem that you continue to overlook. It is called decentralized innovation. It gives us the liberty to self-custody and self-diversify our assets.

Our decentralized framework will never lead to bank runs for the simple reason that there are no institutional banks. Instead, each individual is his or her own bank. With billions of “banks” in circulation, our decentralized system ensures the greatest diversified banking infrastructure in the history of humanity.

Our decentralized framework will never give rise to inflation, for it is underpinned by a multi deflationary cryptocurrency system. In our diversified currency network, there is no centralized entity possessing the power to devalue our currency by printing more of it at its whim.

Our decentralized framework will never trigger 1929, 1987, 2000 or 2008 type of market crashes because our tokenization system ensures an endless proliferation of uncorrelated assets.

It should come as no surprise that, in the interest of ensuring a prosperous America for our children, the people and I have decided to move on to greener - and truer democratic - pastures.

I hope that you and your true love, the asset bubble, find happiness. And in case you have any doubt, please know that it is not me, it is you.

Sincerely,

Fed Up