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The Financial Crisis Was Foreseeable … Thousands of Years Ago
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.
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Hubris: This time it will be different.
It's not that anyone forgot all those things, it's that incrementally the insanity has been crammed down and the media has effectively propagandized the people into complacency. Besides what else can the people do? It's all done at a high level and it's only after the fact that people realize that they were outfitted with concrete overshoes and moved out to the edge of a boat in the bay. Some people know this, but even now most don't. And even if people did know it and want it changed, it's not like the political parties want to change it. They are owned by the corrupt SOB's that created the system.
I generally agree with you, but I sure saw and still see a good deal of cognitive dissonance and denial of the ostrich head in sand variety that baffles me. I just keep thinking about the line in the Matrix alluding to the weasel character about to sell out his crewmates and his reward is to be plugged back into the matrix: "Some people are so hopelessly inurred that they will do anything to keep from waking up.”
"the Constant Gardener" JLC - similar baffling theme.
and we've known for thousands of years that the wages of sin is death.
James the brother of Jesus, did not mince words, as pastor of the Jerusalem church, he was beheaded by Herod. He grew up observing his half-brother, thinking he was crazy and then believing He was the Son of God= God).
Sin is increasing in these last days.
Some think that the "ring" in the Lord of the Rings book series by JR Tolkein was representative of original sin. Perhaps its coincidental that the phrase: "One Ring to rule them all, One Ring to find them,
One Ring to bring them all and in the darkness bind them
In the Land of Mordor where the Shadows lie." seems to fit debt slavery as described in the Bible in Egypt and Original sin. Either way the problem seems to be us and our own self-destructive behavior. I think that just about anyone could come up with a plan to economic prosperity that could be implemented in 5 years. This guy produced 1 million pounds of food on 3 acres.http://www.youtube.com/watch?v=jV9CCxdkOng Maybe Yshua fed the 5,000 this way:) Give nature half a chance and she will bury you in food. I just don't get scarcity. I look around and all I see are untapped renewable resources.
Have a blessed day
I guess your real point is that Mary did not stay a virgin. Why don't you just say that directly?
Sin is not increasing, we simply double down on previous sins and the consequences ensue exponentially.
Hopefully it will be the last days we have to endure the ravings of the religilous and a newfound sanity will prevail.
stiler,
Sin is increasing in these last days.
And time is short............pray for a pre,or mid, not a post catching away.
And every man did what was right in his own sight.
The man of perdition is near.
My friend, the economist, knew.
A friend of mine who is an economist among other things and used to work for the government kept telling me to sell my property because the market is going to collapse. I ignored him until one day when he threw his parents into the street and sold their home.
I sold about 18 months later. It was about a year later than ideal. I lost 50% of my investment, but I did not lose it all, or end up underwater. Unlike a number of my other friends.
He and I were always contrarians to each other. However, for the past few years we have agreed on just about everything and it is not a pretty picture. Though we do not agree on any particular market moves. What we agree on is the uncertainty.
We agree that the government has eliminated price discovery from just about every market, leaving us and the population without any guidance from the market and dependent on the decrees of TPTB.
"NO ONE SAW IT COMING."
We did it for the children.
And we know that when we see the writing on the wall, it takes forever for it to happen.
right on the money, perfect!
http://expose2.wordpress.com/2011/11/20/a-voice-from-the-dark/
Paul Krugman says history's a crock of shit. We now have super computers and wise men (such as him and that Wise Latina on the Supreme Court) that were unknown in past times to guide us through this temporary, albeit painful, morass.
Yeah, sure. Those who forget the past are bound to repeat it. Krugman probably thinks Carlos Santana said that, so, in his opinion what the hell does a musician know about history?
2 plus 2 can equal 5- just keep lying to people, repeating it over and over, call those who deny it "conspiracy nuts" and more than half the people will believe it.
Greed wipes out all memory banks. This time is no different.
again what ZH have missed is the simple fact that we have the lying bastard banks paying the lying bastard accountants whotell lies about the lying bastard corporations who in turn get lying bastard politicians to tell lies to the public about the money the simpleton fuckers think they own.
Thus our economic malaise is simply understood and explained with fuckwits context of lie-ocratic bastardry.....
Dear Terry,
Mr. Logic would agree with your analysis.
Regards,
Victorian Dad.
"It isn't the doing that is the hard part, the hard part is having to admit that you knew".
Excellent set of links.
History doesn't repeat...but it does rhyme.
Cue Fat Lady.....
its nots whether it was forseeable...thats a given
the public is too ignorant or stupid to care...until they are in food lines, living under bridges, shivering in the snow
by then its too late
Yes, ignorance plays a role in this apathy but you grossly misunderstand the malevolence of our masters if you believe that one must be stupid to not understand the history GW presents. I do not wish to write a dissertation, but you should be at least a bit aware that the 20th Century saw an explosion in the understanding of cognitive science - that is, how we think. A cousin of Sigmund Freud by the name of Edward Bernays effectively exploited Freud's work on what makes us tick to develop new tools in public relations and marketing. These ideas were successfully employed, not just by Madison Avenue, but by governments and other powers, perhaps most infamously, by Joseph Goebbels and the Nazis. In a nutshell, if I can influence your emotions, I needn't bother with your intellect.
What I am describing is "lying well." If I can convince you that to be truly free, you must own a car, you would buy one, for who wishes to be a slave? If I can convince you that it is not the price, but the small monthly payment that matters, you would buy a loan. Your intellect is subordinate to your will - and your will can be manipulated.
So, do not consider your fellow citizens to be stupid because they fail to grasp the history GW has laid out - rather, see them as victims of propaganda. Propaganda espoused not just by our government, but by Machiavellian elites who control media, education, and other institutions of our fine society. And read a bit of Lakoff - because they have.
The remnants of the bicameral mind are alive, if not well, still today:
https://en.wikipedia.org/wiki/Bicameralism_%28psychology%29
Our capacity for crazy is unlimited . . . and nothing shapes it better than omnipresent mass media. Internet "echo chambers" are certainly filling in the cracks, however.
Steelhead - Excellent post because it is such a great summary that everyone can understand.
Lakoff?? I'll have a look. Thanks.
I second that emotion.
The sheeple are effectively controlled.
They're stupid because 2007 was a wake up call loud enough to rouse the dead. And still they slumbered.
Jack keeps buying the magic beans.
The trick, in the real world, is keeping him from coming back and beating your ass until you're outta town.
Technologies (which include belief systems) change, but the game never seems to.
But, you never know, maybe this time will be different.
Only those gifted with foresight "knew" those things. Everyone else was enjoying the "illusion of money".
Debt auctions for the month of July total .... $523 Billion ... so far. It's a great mirage until you get close enough and realize nothing is there.
...But...This time is different.
We've also known that the love of money is a root of evil.
The system is the way it is because a few have wanted it that way.
The question is now do informed citizens want to continue along this path to chaos and servitude.
"The price of apathy towards public affairs is to be ruled by evil men." -Plato
Lets hope that in the future there is transparancy across the board, punishable by guillotine in the public square.
Start educating your children now, don't feed them to the machine.
The system only perpetuates slavery and poverty for the masses while a few elite malevolent decadent self-absorbed materialistic superficial sons of bitches bathe in pleasure and self-gratification
Just the resources spent on their manicured lawns alone could support the population of a small country
It doesnt make any sense until you accept that collapse is the objective!