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With the Obama administration now showing a complete "do nothing" approach to the oversight crisis in US banking, it appears Goldman Sachs (NYSE:GS) not only has succeeded in gaining a set of personal keys to the US Treasury Department, but has its tentacles in a complete squeeze of the entire government itself. This feat has been blessed by the Federal Reserve Bank; who together have created an even larger bubble in bank stocks, since before the crash! In any other country in the world today, this would be known as "a conspiracy".

I'd like to take this time to thank one Mr. Phil Grandy who has been one of the most diligent and brave Americans I know on this subject, who has refused to just sit on his hands like the rest of us; showing outstanding courage in his weekly broadcasts of the "Phil's Gang" radio broadcast to educate the public on these injustices now taking place. I join him in his plea to all investors to write every Senator, Congressperson and government representative you know to urge an investigation, make arrests and put a stop to the fraudulent activities between certain members of the US Treasury and Goldman Sachs and to the grossly inflated bank stock prices they are causing through criminal manipulation! I would further state that it is my sincere opinion that these activities are creating a bubble in the markets that will be worst than the one which has already popped and crashed!

This all comes against a backdrop of some pretty startling statistics which are causing the United States to slowly cease being as it ever was intended, while unintentionally decoupling itself to an even greater degree from any stable international economy. Industrial production in the US is still in free falling double digits, while for the first time in 50 years; its GDP rate has decreased for two back to back quarters. Defaults in corporate debt haven't slowed, with some 40 issuers in April alone having fallen prey. By March 2010 Moody's expects this rate to be a whopping 14.3% and no one seems to be paying attention to that ever growing "higher taxes cloud", looming still over potential consumers.

The seasoned professionals who have some of the highest percentages of accuracy in their forecasting outlook, are now leaning heavily toward the consensus that the US will likely experience a double-recession. If you go back to the years 1980 and 1982, the characteristics have very growing similarities with the current rhythms setting the stage for a rise in commodity prices over an environment of monetary easing and a falling dollar.

And while Rome is still burning today, investors chose to celebrate by paying upwards of $3.50 for $1 bank stocks in Citibank (NYSE:C) and $140 for a $60 stock in Goldman Sachs. Goldman's PE at this time is over 30! And about all I can add to this is, "pop goes the weasel"!

Disclosure: Author has no positions in either Citibank or Goldman Sachs.

Source: U.S. Markets Propped Up by Delirious Toxicity