By Charles Hugh Smith
OfTwoMinds.com
Published: March 1, 2011
The U.S. has a deeply counterfeit economy.
Counterfeit money exploits trust by presenting a facsimile of authenticity. A high-quality counterfeit bill (for example, the $100 bills exported by North Korea) are facsimiles of authentic paper notes which then gain the trust of users.
A counterfeit gold bar is a piece of lead coated with a layer of authentic gold. The mechanism is the same: a veneer of integrity tricks the buyer into trusting the validity of the entire bar.
The U.S. has a deeply counterfeit economy.
The predatory mortgages of the subprime era were presented as legitimate mortgages similar to time-honored 30-years fixed notes with a few "minor differences." These were in effect counterfeit mortgages designed to fool the borrowers and buyers. They were mere simulacra of "safe investments."
Like the counterfeiter who plates the lead bar with a thin coating of gold, the ratings agencies coated the lead bar of toxic, high-risk mortgages with the gold veneer of a AAA rating.
Continued. . .
March 2, 2011
The Counterfeit Economy
The Counterfeit Economy
