This page has been archived and commenting is disabled.

The Financial Crisis Was Foreseeable … Thousands of Years Ago

George Washington's picture


We’ve known for 4,000 years that debts need to be periodically written down, or the entire economy will collapse. And see this.

We’ve known for 2,500 years that prolonged war bankrupts an economy.

We’ve known for 1,900 years that rampant inequality destroys societies.

We’ve known for thousands of years that debasing currencies leads to economic collapse.

We’ve known for hundreds of years that the failure to punish financial fraud destroys economies, as it destroys all trust in the financial system.

We’ve known for hundreds of years that monopolies and the political influence which accompanies too much power in too few hands is dangerous for free markets.

We’ve known for centuries that companies will try to pawn their debts off on governments, and that it is a huge mistake for governments to allow corporate debt to be backstopped by government.

We’ve known for 200 years that allowing private banks to control credit creation eventually destroys the nation’s prosperity.

We’ve known for 200 years that a fiat money system – where the money supply is not pegged to anything real – is harmful in the long-run.

We’ve known since the 1930s Great Depression that separating depository banking from speculative investment banking is key to economic stability. See this, this, this and this.

We’ve known for 80 years that inflation is a hidden tax.

We’ve known since 1988 that quantitative easing doesn’t work to rescue an ailing economy.

We’ve known since 1993 that derivatives such as credit default swaps – if not reined in – could take down the economy. And see this.

We’ve known since 1998 that crony capitalism destroys even the strongest economies, and that economies that are capitalist in name only need major reforms to create accountability and competitive markets.

We’ve known since 2007 or earlier that lax oversight of hedge funds could blow up the economy.

And we knew before the 2008 financial crash and subsequent bailouts that:

  • The easy credit policy of the Fed and other central banks, the failure to regulate the shadow banking system, and “the use of gimmicks and palliatives” by central banks hurt the economy
  • Anything other than (1) letting asset prices fall to their true market value, (2) increasing savings rates, and (3) forcing companies to write off bad debts “will only make things worse”
  • Bailouts of big banks harm the economy
  • The Fed and other central banks were simply transferring risk from private banks to governments, which could lead to a sovereign debt crisis

Given the insane levels of debt, rampant inequality,  currency debasement, failure to punish financial fraud, letting the private banks take over the system of credit creation, de-linking of fiat money from anything real, growth of the too big to fails, repeal of Glass-Steagall, refusal to rein in derivatives, sovereigns taking on banks’ debt, crony capitalism, endless war, and other shenanigans … our financial crisis was entirely foreseeable.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 07/20/2012 - 12:02 | Link to Comment New American Re...
New American Revolution's picture

Thanks George, what's your solution???   See  Serfs Up America!

Fri, 07/20/2012 - 12:00 | Link to Comment engineertheeconomy
engineertheeconomy's picture

If we could see thousands of years into the future, what would be revealed? 

People will look back at this period in time and they will ask " They just let the Bankers  print themselves all the  money they wanted for free?" and " They we're so stupid that they didn't understand that Usury is unpayable?" as well as " What took them all so long to figure it out to just pull out their guns and start shooting?" and "They actually watched TV?"

Fri, 07/20/2012 - 10:14 | Link to Comment dannynewmexico
dannynewmexico's picture

wasn't it Nimrod who told his people that their gold and silver

would be safe in the temple of the sun god, and gave them a

clay tablet in place for their silver and gold???


looks like deja vu all over again, Yogi Berra,

Fri, 07/20/2012 - 09:36 | Link to Comment rwe2late
rwe2late's picture

''We're an empire now, and when we act, we create our own reality."

- Ron Suskind, senior advisor to GWBush


Fri, 07/20/2012 - 09:23 | Link to Comment ONO47
Fri, 07/20/2012 - 08:39 | Link to Comment babylon15
babylon15's picture

What does lax oversight of hedge funds have to do with anything?  Most hedge funds are leveraged less than 2 to 1 and often have a combination of long and short positions that cancel each other out.  Meanwhile, many investment banks and insurance companies use 30 to 1 leverage and all bets are long.  Hedge funds are not the problem.

Fri, 07/20/2012 - 10:08 | Link to Comment GMadScientist
GMadScientist's picture

Collecting 2 and 20 to earn _____? LOL!

Go buy some more AAPL, STFU, and enjoy your tax advantages, beotch.

Fri, 07/20/2012 - 07:57 | Link to Comment BeetleBailey
BeetleBailey's picture

The Colorado shooter had the wrong venue for his shooting spree....not a theater full of sheeple....but a convention of bankers, Bilderburg Twats and politicians.......


Fri, 07/20/2012 - 09:40 | Link to Comment areopagetica
areopagetica's picture

I think you should drop that kind of talk.  No doubt there are plenty of people so inclined, it is likely to happen, and it will not be good.

Fri, 07/20/2012 - 03:35 | Link to Comment Savyindallas
Savyindallas's picture

Yeah  -but how could anybody have known that that there was a housing bubble that was going to burst? Everyone thought housing prices would keep rising forever-- Bush thought so, the Clintons thought so  -Bernake and Greenspan thought so. All the big banks agreed -and it's their job to know such things  -otherwise they would go bankrupt and go out of business. Black Swans happen. Why should we blame and punish the Bankers, Regulators and Congress? How could they have known?

Fri, 07/20/2012 - 08:38 | Link to Comment Gadfly
Gadfly's picture

You're joking, right?

Fri, 07/20/2012 - 03:51 | Link to Comment AldousHuxley
AldousHuxley's picture

Your DEATH has been predicted on the day of your BIRTH.


Part of life.

Fri, 07/20/2012 - 03:57 | Link to Comment Savyindallas
Savyindallas's picture

Man -that's deep.

Fri, 07/20/2012 - 00:38 | Link to Comment syvanen
syvanen's picture

Hudson had a great essay a few years back about the unsustainability of compound interest.  He described how the Babylonians dealt with the problem. Every so often, (7 years?) the God king would wipe out debt.  This was money that the farmers borrowed to plant their crops. It was a way to reduce the mathematical problem inherent with compound interest.


I can't say I was persuaded with his argument but it was definitely an interesting perspective.  I guess in those days the financiers had not yet figured out how to use inflation to reduce the burden inherent in compound interest.

Thu, 07/19/2012 - 23:23 | Link to Comment gdogus erectus
gdogus erectus's picture

This is one of those articles that you want to read but are too busy so you read it later when it gets to the right of the header. And you love it because you are a student of REAL history... Ok back to my Nth drink.

Thu, 07/19/2012 - 22:37 | Link to Comment reader2010
reader2010's picture

But they alway think THIS TIME IS DIFFERENT since they've got digital print press technology in their hands. 

Thu, 07/19/2012 - 22:30 | Link to Comment which way weste...
which way western man's picture

We've known about the khazarian "jew" and his nation wrecking m.o. for 1300 years

Fri, 07/20/2012 - 03:38 | Link to Comment Red Pill
Red Pill's picture

Yep, it's all perfectly well prescribed in their ''Book of Esther'' how to do it.

Third section of the Tanakh.

Fri, 07/20/2012 - 01:39 | Link to Comment i-dog
i-dog's picture

They've been doing nation wrecking for 4,000 years (first as the "Hittites", then as the "Hyksos") and we have known about their political shenanigans and their ideology since the first obvious split of the Pharisees ("illuminated" elitists and money lenders) from religious Judaism 2,600 years ago.

The conversion of the later remaining Khazars to Judaism 1,300 years ago was just a more recent political expedient of the very same tribe.

Thu, 07/19/2012 - 22:09 | Link to Comment world_debt_slave
world_debt_slave's picture

Research the Magna Carta to see what our forbears were able to accomplish and we should be able to do the same today, that is if we still have the same spirit to do so.

Thu, 07/19/2012 - 20:55 | Link to Comment boiltherich
boiltherich's picture

And we have known for a few years that all of the above will be done anyway, that once you permit one of the above to fester it is an inevitibility that others will follow.  But, what we now really know is that once governments and politicians start to lie to the people and worse believe their own lies, it is only a matter of time till the revolution starts. 

Thu, 07/19/2012 - 22:11 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

The only problem with the Revolution theme is that usually all the wrong people get killed. History denotes this. You take it straight to TPTB to ensure that doesn't happen.

Fri, 07/20/2012 - 01:31 | Link to Comment i-dog
i-dog's picture

+6.5 billion (on behalf of those that TPTB would like to eliminate)!

Spot on. We need to take the initiative and push every state house and media outlet for secessions from the massive globalist spider web.

The French "Revolution" was TPTB using the people to do the dirty work of which they themselves weren't capable ... taking down the Bourbons and driving Protestants out of France.

The Russian "Revolution" was TPTB using the people to do the dirty work of which they themselves weren't capable ... taking down the Tsars and the Orthodox Church.

In both those cases, TPTB used the people's righteous indignation against the obvious corruption and profligacy of the Bourbons and Tsars to actually achieve the real objective of TPTB ... elimination of their rising opposition.

This time around, TPTB are stirring up righteous indignation against the obvious corruption and profligacy of banksters and politicians in order to achieve their real objective ... global government and elimination of any future opposition from the wealthier end of the middle class.

GW, Max Keiser, Alex Jones, and others, are those loudly stirring up a witch hunt against the banksters and politicians ... while never once mentioning the allegiance of those in the highest planning groups, nor ever pointing out the obvious solution that the middle class could take to end the rule of the central planners.

Thu, 07/19/2012 - 19:50 | Link to Comment Stuck on Zero
Stuck on Zero's picture

We've also known since Shakespeare's time that if you put lawyers in positions of power everything will come unglued.


Thu, 07/19/2012 - 19:06 | Link to Comment GlomarHabu
GlomarHabu's picture

On war.

It's mankinds natural state. Peace is only the interstitial time between wars.

Thu, 07/19/2012 - 20:26 | Link to Comment SafelyGraze
SafelyGraze's picture

Gomar says "On poverty. It's mankind's natural state. Prosperity is only the interstitial time between poverties."

Dude. It's spelled "poverty's".

Fri, 07/20/2012 - 00:54 | Link to Comment i-dog
i-dog's picture

Not in the sentence you used it in, it isn't!

Dude. Keep grazing (though I doubt that you're safe!).

Thu, 07/19/2012 - 19:35 | Link to Comment wretch
wretch's picture

You don't understand war, mankind or nature.  I'm not even sure you understand how to type.  Is your mother typing messages out for you?

Thu, 07/19/2012 - 18:44 | Link to Comment Escapeclaws
Escapeclaws's picture

George, I thought you were going to give us some great quotes from the Greeks and Romans. Oh well....

Thu, 07/19/2012 - 19:27 | Link to Comment George Washington
George Washington's picture

Do you know any good ones?

Fri, 07/20/2012 - 09:08 | Link to Comment my puppy for prez
my puppy for prez's picture

George:  Cicero was quite prolific in the quote department!  Just google Cicero quotes and you will find plenty of good material.

Thu, 07/19/2012 - 18:48 | Link to Comment Jay Gould Esq.
Jay Gould Esq.'s picture

Would that Diocletian had a Federal Reserve System...

Thu, 07/19/2012 - 22:08 | Link to Comment world_debt_slave
world_debt_slave's picture

yep, just re-reading the history of Ceaser and in 44BC, March, was assassinated by TPTB due to Ceaser wanting to reform government and help the common people.

Those that ignore history are doomed to repeat it.

Fri, 07/20/2012 - 08:30 | Link to Comment CynicLaureate
CynicLaureate's picture

History is the study of what people do in certain situations.
Knowing what people have done will not keep them from doing it again.
People are just stupid. 

Thu, 07/19/2012 - 23:40 | Link to Comment fourchan
fourchan's picture

what happened to rome?

Fri, 07/20/2012 - 01:40 | Link to Comment world_debt_slave
world_debt_slave's picture

During the time of Julius Ceasar, there was plenty of intrigue and treachery, same as today.

Fri, 07/20/2012 - 00:51 | Link to Comment i-dog
i-dog's picture

It's still the Pharisees' strategy centre. Don't be fooled by the ruins....

Thu, 07/19/2012 - 18:04 | Link to Comment Whalley World
Whalley World's picture

With the upcoming depression, anyone who lives near a coast can eat like a king, all you need is a surf board.

got butter and garlic baby?

Thu, 07/19/2012 - 19:07 | Link to Comment GlomarHabu
GlomarHabu's picture

.... or be eaten

queue the soundtrack ...

Thu, 07/19/2012 - 17:55 | Link to Comment blindman
blindman's picture

profess !

Thu, 07/19/2012 - 17:51 | Link to Comment DosZap
DosZap's picture

We were warned in the 50's, by Pres. D.D Eisenhower...............and we/they did nothing.

Fri, 07/20/2012 - 03:40 | Link to Comment Savyindallas
Savyindallas's picture

Kennedy tried to warn us too  -so they killed him. Henry Ford also tried to warn us-so they caused the Great Depression and WW2. .

Thu, 07/19/2012 - 22:36 | Link to Comment Bringin It
Bringin It's picture

We were warned in the oughts by Lindberg's father.  It may have cost him his grandson.

Thu, 07/19/2012 - 22:22 | Link to Comment steelrules
steelrules's picture

JFK tried and paid with his life.

Google executive order 11110


On June 4, 1963, a little known attempt was made to strip the federal reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation.

Thu, 07/19/2012 - 17:32 | Link to Comment adr
adr's picture

When someone says, "Everything will just keep going up."

Tell them to look up.

Then kick him really hard in the balls.

You then say, "If you would have looked down you would have seen that coming."

Fri, 07/20/2012 - 14:27 | Link to Comment rayduh4life
rayduh4life's picture

With a good enough kick, you won't see that coming anytime soon.

Thu, 07/19/2012 - 19:29 | Link to Comment DogSlime
DogSlime's picture

Brilliant :)  I must remember that one.

Thu, 07/19/2012 - 17:40 | Link to Comment canadiandollar
canadiandollar's picture


Thu, 07/19/2012 - 17:16 | Link to Comment printmoremoney
printmoremoney's picture

The only way out is to print more money and issue more debt. And I mean HUGE amounts, like never seen before. And if it is invested in real projects with real value, we will survive.

If they stop the 40 years of debt expansion now, welcome to the deflation death spiral into hell. Kiss civilization good bye!

Richard Duncan, author of The New Great Depression says that $50 Trillion of debt has been created in the last 40 years and if it stops, the house of cards folds. No room for adjustments, it is ZIRP and more money prints, or else.

I hope he is wrong. But his ideas makes sense....


Thu, 07/19/2012 - 18:06 | Link to Comment blindman
blindman's picture

debasement is the solution to fraud?
well, stealing is the solution to
fraudulent inducement and control fraud?
most likely not.
Celtic Wonder-The Briar and the Rose
turn this up

Do NOT follow this link or you will be banned from the site!