In an op-ed column appearing today in the Washington Post, Federal Reserve Chairman Ben Bernanke made clear that he believes that legalized fraud should continue to exist and to dominate the dollar-based monetary system. He wrote, "Understandably, many people are calling for change. Yet change needs to be about creating a system that works better, not just differently. As a nation, our challenge is to design a system of financial oversight that will embody the lessons of the past two years and provide a robust framework for preventing future crises and the economic damage they cause. "

In other words, the problem in Bernanke's view isn't that the current system engages in legalized fraud. He finds that policy completely acceptable. He only wants to regulate it more. Regulated legalized fraud, in his view, is the solution.

He's 100% wrong.

Most people don't realize that regulation is not about preventing harm to people. To the contrary, regulation is about deciding which people shall be allowed to harm others, and which people shall not be permitted to harm others, under particular circumstances. This has been the unstated justification for allowing legalized fraud to continue throughout the centuries within the banking industry. Bernanke and his fellow fiduciary apologists readily buy into the idea that the bankers with the greatest wealth and most diverse investment portfolios should be permitted to continue to fleece the public through their cooperative efforts to expand and (occasionally) contract the money supply, all in the name of "progress". Never mind that such progress is an illusion, that it actually results in poverty and harm to the people at the lowest levels of the pyramid. Never mind that people in the middle levels of the pyramid will be hurt next. Never mind that the current financial crisis has clearly exposed to all the fact that no one, not even the richest and most diversified bankers, should ever be "entrusted" with the power to engage in legalized fraud. What matters most is that the current system of fraudulent behavior should continue, regardless of the consequences. As long as we regulate it, Bernanke argues, we'll be okay.

Of course, we know he's lying. Bernanke and company have us on track for eventually experiencing the mother of all calamities, and they continue to trust that people will not generally notice. A monetary system which depends upon debt for its expansion constantly creates a double-whammy effect. It permits virtually unlimited monetary expansion while making the victims of that expansion responsible for paying the interest on all the debt created in order to expand that same money supply. When the nation's credit card finally maxes out, the double-whammy will devastate this country, and the world, until we wise up and abandon their craven system.

In case Mr. Bernanke or his minions read this article and wonder what I'm talking about with my phrase, "legalized fraud", let me spell it out for them. Banks which lend money that belongs to someone else without the express permission of the owners of that money on a case-by-case basis thereby engage in legalized fraud. Banks that lend money long-term using short-term funds engage in legalized fraud. Banks and governments that issue new money backed by nothing but debt engage in legalized fraud. These forms of fraud, of course, have existed and been considered legal for centuries. They are also the root causes of virtually every financial crisis this country (and the rest of the world) have ever experienced.