Madoff, Banks and the Fed

Bulls and Bears make Money, but Pigs get slaughtered.

Do you think the Madoff investors were Bulls, Bears, or Pigs?

In every endeavor to make money, there are those that get greedy. Stockbrokers and trading houses, dupe clients into buying house stocks the firm does not want. House stocks are stocks that the brokerage firm owns. They buy and sell on their own behalf. When the firm wants to invest in a different stock, they convince their clients to purchase stock that the firm no longer wants. The stock would not appreciate as well, as the broker promised. What a great liquidity trick.
Banks get greedy by nickel and dimming their clients, and then giving the clients pennies for interest payments. Banks can also increase money by the use of the monetary multiplier; in short this is how much more money they can lend out, based on how much is deposited into the bank. If a person deposits $100, the bank then is required by the Fed to hold 20% in reserve and the rest can be loaned out. If the bank keeps doing this, holding 20% and then loaning out 80%, the bank expanded its money supply buy $400. This only works if the loans stay with the same bank, and on top of this, they charge interest for each of the loans. Things change dramatically if a person gets a loan from a bank and deposits it in another bank, or if a loan is paid off early. I feel bad that the banks are having such a hard time.
Some people would be surprised to know the Federal Reserve is not part of our Federal Government; it is a self-regulating body of the banks. The Fed makes monetary policy that is in the best interest for the banks, not the Citizens of the United States.
The Fed has bloated the money supply so much because gold does not back the dollar, if it did, our economy would not be so bad. The gold supply is limited and in turn the value would be higher, as well as the dollar would be better valued.
The Madoff investors were large and small, vast and wide; many I would assume many of then had advanced degrees. It goes to show even smart wealthy people get suckered, or did they? It seems most people are not concerned on how the buck is made as long as they are on the receiving end of the buck.
All of this is relevant because Madoff had a Ponzi scheme with nothing to back the investors’ money, much like the Fed does not have the gold to back the American citizens bloated money supply.

So to re-state it "Bulls and Bears get slaughtered, Pigs make Money".