The High Cost of Greed ...

Money Morning subscriber Ted Kubichek wrote and asked if one of our experts could comment on the underlying cause of the financial crisis whose fallout will affect the U.S. economy for years. Here's an edited version of that question, as well as the reply by Money Morning's Shah Gilani, an internationally recognized expert on the global credit crisis.

Question: I would appreciate if Money Morning could respond to my statement or theory of why we are in this crisis. I believe they [government insiders] are afraid of the backlash from making a comment of the true reason we are in this crisis. As it would be political suicide to do so for anyone in that position.

"Greed," and its overwhelming baggage of "arrogance and corruption," has far surpassed what the economy can absorb while still being able to prosper. Not just monetarily, but ethically as well. Business decisions that have been made/bought with the mindset of self and partnered greed, not for the prosperity of a nation.

I would love to hear someone's reaction to this. Am I off my rocker? Or is what I'm saying some sort of forbidden truth? The greed is so intertwined with so much of our economy and society that comprehending it boggles the mind - at least for me.

Answer: Mr. Kubichek, as you pointed out, the answer to your question as to why we are in this crisis is very straightforward: It is a matter of "greed."

As to why not enough voices are echoing your sentiment, that, too, is a matter of greed.

An inordinate number of our legislators are in the deep pockets of the purveyors of greed, because they, too, are greedy. Unfortunately, most politicians go into the "business" of politics because the ability to wield political persuasion results in the ability to clear pathways for constituents. When a minority of constituents controls a majority of economic power, the tail wags the dog. Washington is a giant revolving door. Do good by your moneyed constituents and there will be a place at the dinner table when your inside job is done.

What would be an incredible undertaking - although it might wake up the poor, uninformed masses - is an extensive expose on every politician/legislator who in the last 20 years has had any power to steer any decision, regulation or vote (we could go back 50-100 years ... it doesn't matter). This undertaking would have to follow their rhetoric and voting in light of who corresponded with them, who paid them anything (campaign money, "charitable" donations, etc.), whoentertained them, and where they and their family, staff, and cronies ended up later in the cycle of "you scratch my back, I'll scratch yours."

What this country needs is more people like you! We should all be yelling from every window, "I'm sick and tired and I'm not going to take it any more!"

Thank you for being part of the solution, simply by addressing it. Every revolution starts with a single man. You're as good as they come ... raise your voice and start your own revolution. I'm doing my part.

[Editor's Note: Money Morning Contributing Editor detailed the causes of the U.S. financial crisis in a special report this week. To check out that report, please click here.]

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About the Author

Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.

The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.

Shah founded a second hedge fund in 1999, which he ran until 2003.

Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.

Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.

Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.

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