Sam Bankman-Fried is not the only fraudster in America

Sam Bankman-Fried was shuffled off to his new digs in the Bahamas, where it seems likely that he will be spending a great deal of time. That his “mortal coil” might be shuffled off as well is an open question in the era of Jeffrey Epstein.

Who are the bigger fraudsters, though? A spoiled kid who bilked his investors for billions or a bureaucracy that prints and spends public money with reckless abandon?

It would take an eternity for SBF to graduate to the level of these government and quasi-government scammers. At the time of his bankruptcy filing, FTX’s liabilities were in the neighborhood of ten to fifty billion dollars. Compare that to the greater than $31 trillion in debt the U.S. government has rung up. That’s a big number. Though the current administration is not solely responsible for the dismal debt situation in which we now find ourselves, it has significantly accelerated the death spiral.

Imagine how footloose and fancy-free Sam would have been if he could have employed the same debt deferment plan as the U.S. government and the Federal Reserve. Printing money is a great way to bolster your financial situation. We could all be quite wealthy if that method of alleviating debt were widely available.

Unfortunately for us, only the feds can utilize the benefits of the printing press. If anyone else wants to try that route, they would quickly find themselves in the cell next to SBF because, of course, if everyone suddenly became wealthy, the economy would crash overnight. So instead, we get to witness a slow-motion crash born out of government irresponsibility and desperation. There are ways out of this mess, but there is no political will to employ them.

Image: Sam Bankman-Fried. YouTube screen grab.

So how is it that the Feds get to print as much money as they want? The short answer is that paper money is no longer tied to any “real” assets. It is only backed by the “full faith and credit of the United States government.” For those who no longer have faith in the credit of the United States, psychologically, your money is already at risk, and you’re probably looking for some alternatives to the dollar. The rest of us adopt a fragile and precarious wait-and-see attitude.

Those with political power can and do use the money supply to advance whatever goals they’re trying to achieve, whether they be economic or political. To achieve their goals, they have the government spend money it doesn’t have, and then they run the printing press to make up at least some of the difference.

The problem for the average citizen is that the more dollars put into circulation, the less each one is worth. Americans are making as much as they were before, but they now have less buying power. It’s a great political grift, at least for as long as it lasts.

As for that lesser grifter, Sam Bankman-Fried, when it comes to the details behind his money games, the reality is that he won’t be appearing before Congress anytime soon. With his testimony scheduled for the following day, government goon squads promptly sequestered him indefinitely.

Still, that SBF would be talkative while appearing before Congress seems unlikely. It would probably be a Fifth Amendment palooza. There would be nothing to gain by talking and almost certainly a great deal to lose. It might be wise for SBF to copy Elon Musk and announce publicly that he is not depressed and has no desire to harm himself.

If SBF ever does testify before Congress, it would be interesting to see just how deep this new rabbit hole goes. He was, after all, the second largest donor to the Democrat party in the just-completed election cycle, and all the money he distributed belonged to other people. Will the Democrats be returning the $40 million he donated in 2022? Don’t hold your breath.

SBF and other private market fraudsters must be a tad envious of the government’s money-printing operation. Perhaps that’s the reason they donate to Democrats. They all want to ride on the public money gravy train or, at least, they’re trying to get on board.

Frank Liberato is a pseudonym.

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