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Is The Fed Responsible For The Great Financial Crisis?

Tyler Durden's picture


"Recessions are a natural economic feature and their regular occurrence is healthy and indeed essential," is how Deutsche's Jim Reid introduces his investigation into post-Fed un-natural business cycles. Without them there is a serious danger of bubbles and the misallocation of resources as the further market participants detach themselves from the last downturn the more they tend to under-estimate risk. We,


Jim Reid, Deutsche Bank: The history of business cycles in the US

The chart below shows the duration of each economic expansion (i.e. between all US recessions) since the NBER started collating statistics from 1854. This highlights the fact that prior to the GFC the three preceding expansions were in the top five on record. We can also show that this cycle is now almost exactly average length through history.


If we re-order these cycles by duration we can show more clearly how this current US expansion compares to those through history.


We passed the median cycle length at the start of 2012 and we will be past the historical average point by the end of this month (September 2012). This expansion is now the 12th longest out of 34 since 1854.


There are those that suggest that the Fed's inception back in 1913 has allowed for longer business cycles and for those interested we have colour coded those cycles (above) that occurred after this point, and also those post WWII when overall economy debt seemed to start a YoY increase that continues to this day. Countering the argument for longer post-1913 cycles would be the view that without the Fed helping to elongate several recent cycles, the GFC we've just been through might not have been anywhere near this deep and we are therefore now left in a unique situation at what is at the likely end of a multi-decade leverage binge consisting of several artificially long cycles. We are also now arguably in a liquidity trap where the Fed are less potent that they have been before in their near 100 year history.


The three 'super-cycles' between 1982 and 2007 were the exception rather than the norm, one where Central Banks and Governments had almost total flexibility over policy. The conditions that allowed for these long cycles perhaps started a decade earlier with the already much talked about collapse of the Gold Standard.


Unfortunately the 25-30 year build up of excess that this facilitated led to the GFC being the worst crisis since the 1930s and we have now likely moved to an era where policymakers no longer have the flexibility that defined the previous 25-30 years. Most Developed World (DW) Governments are up against their fiscal limits and are actually being forced into economically damaging austerity. We also have interest rates across the Western World that remain close to zero with little room to be lowered further. While we do have money printing, we are close enough to a liquidity trap that flooding the market with printed money doesn't have the same immediate impact on the economy as a cut in interest rates did in the long leveraging stage of the super-cycle.


So not only are we battling with the huge structural problems that the post-credit crisis world brings, we are fighting it without much policy flexibility and are indeed being forced into a reversal of stimulus at arguably exactly the wrong time.


So it all adds up to a return to more normal length business cycles in our opinion. Indeed one could make an argument for shorter cycles than normal given the lack of policy flexibility relative to most of history.


We, like Jim, would argue that the reason the Great Financial Crisis was so deep was due to the authorities continued refusal to let the business cycle take its natural course.


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Tue, 09/04/2012 - 21:28 | 2762914 Flakmeister
Flakmeister's picture

Yes, to a point...

However, it ain't the Feds fault that geology said no mas....

Tue, 09/04/2012 - 22:02 | 2762993 Ahmeexnal
Ahmeexnal's picture



Sep 5, 2012 - 01:51


TOKYO (Reuters) - Japan has agreed to buy disputed East China Sea islets, claimed by both Tokyo and Beijing, from their private Japanese owners, Japanese media said on Wednesday, a move likely to fuel tensions between Asia's two largest economies.

The uninhabited islands, known as Senkaku in Japan and Diaoyu in China, have long been a source of friction. Japan and China have competing territorial claims to the islets and surrounding fishing areas and potentially rich gas deposits.

The Japanese government will buy the islets for 2.05 billion yen (16.48 million pounds) and the owners will sign a contract soon, the Japanese dailies Asahi and Yomiuri said.

The planned purchase of the islands, controlled by Japan and claimed by Taiwan as well, will be approved in a cabinet meeting as early as mid-September, the newspapers said.

Tue, 09/04/2012 - 22:19 | 2763031 Jstanley011
Jstanley011's picture

War between China and Japan, now that would be a swan of a different color. Not black, red...

Tue, 09/04/2012 - 22:26 | 2763048 AldousHuxley
AldousHuxley's picture

Fed controls both booms and busts......

what they are supposed to be doing is make markets stable in order for businesses to plan properly, so you don't have bubbles and depressions....


Fed is bipolar these days



Wed, 09/05/2012 - 06:17 | 2763700 Fizzywig
Fizzywig's picture

Huxley, I always look forward to your comments.  I don't care who votes you down.

Wed, 09/05/2012 - 06:37 | 2763721 Al Gorerhythm
Al Gorerhythm's picture

It's the two resident Fed trolls.

Wed, 09/05/2012 - 04:49 | 2763639 teahouse
teahouse's picture

is there any confirmation? is not Hillary Clinton in Beijing now?


Tue, 09/04/2012 - 22:22 | 2763032 TheObsoleteMan
TheObsoleteMan's picture

This isn't the 1930s. Japan had better tread carefully, VERY carefully. There is a price to pay for sitting back on your arse and letting your former adversary foot the bill for your national defense {I know all about the Treaty}, especially one that can barely hold on to it's own these days.

Tue, 09/04/2012 - 23:28 | 2763198 icanhasbailout
icanhasbailout's picture

Japan is the peer of the UK and France in military spending.

Wed, 09/05/2012 - 01:38 | 2763445 TheObsoleteMan
TheObsoleteMan's picture

Japan has no navy, only a coastal defense fleet which can not remotely defend it's interest outside of the main islands {and against China, even that isn't enough}.

Wed, 09/05/2012 - 01:57 | 2763471 chump666
chump666's picture

Next major war will be naval, probably South China Sea.

Most likely soon.  And yes I blame central banks for driving up the war juice - oil

Tue, 09/04/2012 - 22:24 | 2763043 ACP
ACP's picture

Is the sky blue? The Fed has been responsible for EVERY financial crisis in the US since it was created. Not only that, it MAGNIFIED the amplitude of the sine curve before, during and after every crisis.

Wed, 09/05/2012 - 01:39 | 2763448 gwiss
gwiss's picture

Hmmm..... I think it's the Triffin dilemma.  When you have the reserve currency, you need to keep the money supply flowing to satisfy international demand, but this is inherently inflationary.  Thus your national monetary and global monetary priorities are fundamentally incompatible with each other.   Thus, reserve currencies always have long periods of expansion during which times seem booming in the country which owns them, followed by eventual international repudiation of the currency.  That's why our expansions have been longer post WWII, and even longer after we finally admitted that we were expanding the dollar supply and wouldn't stop, and cut off gold redemption for countries like France who didn't like getting robbed while holding the currency we were inflating.  Our "great moderation" is partially explained by this international expansion of dollars which showed up as a persistent current account deficit.  Is this the Fed's fault?  Sort of, but not really -- they weren't the ones who forged the treaties making US dollars the sole reserve currency.


Wed, 09/05/2012 - 02:00 | 2763480 ACP
ACP's picture

While I agree that fiscal policy has flooded the world with dollars, I disagree with the greater argument because the Fed is responsible for controlling monetary policy, which should have mitigated this situation, but over the years and much more recently, has exacerbated the situation.

In addition, the empirical evidence here and elsewhere strongly suggest the rate of inflation in the US began its meteoric rise shortly after the creation of the Federal Reserve, and well before Bretton Woods.

Of course, as I have suggested before, there are at LEAST two currencies in every country: A nation's sovereign currency, and gold/silver. While it still puzzles me why human beings are so "stuck on gold," 6,000 years of history have proven that when all else fails, that is the world's reserve currency.

Wed, 09/05/2012 - 09:19 | 2764103 gwiss
gwiss's picture

I'm not a fan of the Fed.  It's a jacked up system controlled by elite for the benefit of elite.  But, there has often been tension between the Fed and the Federal government.  The Fed waffles between fulfilling its mandate, which is never popular with politicians but is popular with bankers who have a long term gaze, because for banks monetization is a short term strategy that long term kills the goose who lays golden eggs.  Banks make money for nothing with the Fed system.  Yes, there is a short term burst in their profits if they support monetization, but long term this kills the system and the thinking bankers know this.

The people who don't know this and don't care are politicians, whose future gaze is forever stuck at 4 years or less, which is their reelection window.  If the people want printing, then the politician who doesn't support it doesn't last more than 4 years, so guess what they support?  Thus we see periods of tension, such as when Truman fired Fed chairmen and eventually coopted the system, and periods when the Fed regains independence, such as Volker, who proceeded with an immensely unpopular plan because he understood the long term necessity if the system was to be preserved.


The Fed has been in a long phase of being politically controlled with Greenspan followed by Bernanke, which is why their policy has been what it has been and why their concerns have competely oozed past protecting their monopoly.  They are trying to help protect the current political system, and are sacrificing the current monetary system in order to do so.

Politics is why the dollar was chosen as reserve currency, and politics determines when we go fight wars we can't afford, such as Korea and Vietnam and Iraq and Afghanistan, and politics determines when we decide to strap on crushingly heavy burdens economic burdens such as transfer and social safety net schemes, and these are the things that we are inflating our currency in order to afford.


What do you see as the Fed's game plan if you think they are driving?  How does it benefit the Fed to destroy the system?

Tue, 09/04/2012 - 22:36 | 2763068 Silver Bug
Silver Bug's picture

They most certainly played a key role.

Wed, 09/05/2012 - 06:36 | 2763720 Al Gorerhythm
Al Gorerhythm's picture


Tue, 09/04/2012 - 21:32 | 2762923 Dr. Engali
Dr. Engali's picture

And the reason why the whole system will crash and burn
Is because they won't let the purging run it's course.

Tue, 09/04/2012 - 22:28 | 2763034 holdbuysell
holdbuysell's picture

Because they can't...Lehman showed that the derivatives mess is so interconnected and massive that if there's even a whiff of deflation, everything collapses.

Greece with a couple dimes worth of CDS in a relative sense gave ISDA a heartache when it came to determining a default.

It goes back to what Tyler described many times: gross = net

Wed, 09/05/2012 - 07:08 | 2763119 Dr. Engali
Dr. Engali's picture

That's one story..if you are a believer of official stories. Of which I am not, and I will cite 911 as my example. I will propose another theory. The "Lehman moment" was needed to scare the sheep into compliance for the greatest wealth transfer ever. Once the sheep were plenty scared TPTB could write any check they wanted to, and they still capitalize on it today. Except now they use it on a sovereign level. They like to tell us: "Even though Greece is small there is still counter party risk!"We don't want another Lehman moment". Just like they used 911 to turn the U.S into a police state they used the planned take down of Lehman to transfer trillions of wealth from us to them. So I call bullshit on "the Lehman moment".

Tue, 09/04/2012 - 23:56 | 2763246 LMAOLORI
LMAOLORI's picture



The politicians are ultimately to blame IMO they put the Fed in place and have left it in place it's a convenient scape goat so they can continue to deficit spend.  There is plenty to blame the Fed for though like IOER payments to it's member banks for one and keeping interest rates low creating the housing bubble for another (though that too was at least in part political).  I agree with you about Lehman and the financial system being so interconnected. Though it wasn't a whiff of deflation that set it off it was a whiff of easy money by other players who smelled blood in the water. 

Tue, 09/04/2012 - 21:32 | 2762927 buzzsaw99
buzzsaw99's picture

the banks end up owning it all bitchez. that is the only natural feature.

Tue, 09/04/2012 - 21:42 | 2762931 Cognitive Dissonance
Cognitive Dissonance's picture

"We, like Jim, would argue that the reason the Great Financial Crisis was so deep was due to the authorities continued refusal to let the business cycle take its natural course."

If you never remove the economic butt plug things are gonna get a bit stopped up.

Just sayin'

Eventually nature takes its course and the butt plugee gets very very sick and dies.

Tue, 09/04/2012 - 21:43 | 2762955 Dr. Engali
Dr. Engali's picture

CD you are one sick individual, and now I have an image in my head that wouldn't otherwise be there. :->

Specifically a bloated green corpse exploding feces all over the place.

Tue, 09/04/2012 - 21:49 | 2762966 Cognitive Dissonance
Cognitive Dissonance's picture

"CD you are one sick individual, and now I have an image in my head that wouldn't otherwise be there. :->"

4 out of 5 Cogites agree with you.

Worse......Mrs Cog just informed me that after that comment there will be no nookie tonight.

Wed, 09/05/2012 - 04:37 | 2763630 Colonel Klink
Colonel Klink's picture

Well at least you still have your buttplug to keep you warm.


Hahahahaha.  Sorry CD.

Wed, 09/05/2012 - 09:07 | 2764077 Cognitive Dissonance
Cognitive Dissonance's picture

I don't know WHAT you're talking about. :)

Tue, 09/04/2012 - 21:40 | 2762944 RobinHood73
RobinHood73's picture

Proper price discovery has been so badly damaged by the FED's actions and  the ubiquitous "Bernanke put" that the Fed has had to go "all in". No politics here.  It is moronic and will be read about in great detail by Chinese elementary students in about 5 years time.

Tue, 09/04/2012 - 21:40 | 2762945 chump666
chump666's picture

The Fed should be encased in concrete and lead.

Bury the toxic f*ckers.

Thank you.

Tue, 09/04/2012 - 21:41 | 2762948 Michael
Michael's picture

The Federal Reserve Corporation is the root of all evil.

Tue, 09/04/2012 - 21:56 | 2762986 SAT 800
SAT 800's picture

This is false; and it is a serious mis-understanding. The Fed is an enabler for the Federal Government; which is 100% responsible. Democracies don't work because the people find that they can induce the law makers to vote them monies from the public purse; or in the case of the Military-Industrial complex, which we were warned against by Eisenhower, simply demand that public monies be directed to them. Once limits are removed from the quantity of Federal Monies, (removal of the international redeemability of the dollar), disaster is merely a matter of waiting.

Tue, 09/04/2012 - 22:12 | 2763014 Michael
Michael's picture

Are you saying the people who created the Fed are still alive, or the people alive today could have stopped the formation of the FED 100 years ago?

The answer to both questions is No, and once the demon was born it became unstoppable. The Federal Reserve corporation is pure EVIL!



Wed, 09/05/2012 - 08:57 | 2764057 Papasmurf
Papasmurf's picture

It was absolutely stoppable.

Tue, 09/04/2012 - 21:51 | 2762969 vertexa
vertexa's picture

The man in charge of our financial system, Federal Reserve Chairman Ben Bernanke, is not going to save our economy.  He didn’t see the last financial crisis coming, and even after things started falling apart he continued to insist that housing prices would not go down and that we would not have a recession.

Well, it turned out that we had the worst housing crash and the worst recession since the Great Depression of the 1930s.

But still millions of Americans are trusting him to save us this time around.

It isn’t going to happen.

The truth is that the design of the Federal Reserve system itself is fundamentally flawed.

The biggest reason why the U.S. government is 16 trillion dollars in debt is because the system is designed to create gigantic amounts of government debt.

Some Of The Really Bad Things That Could Happen If You Do Not Prepare For The Coming Economic Collapse

Wed, 09/05/2012 - 03:33 | 2763569 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Who was it that said of the Federal Reserve System, it's not Federal, there are no Reserves, and it isn't a system.  Pure evil to the nth power.

Wed, 09/05/2012 - 08:59 | 2764060 Papasmurf
Papasmurf's picture

For Ben, this is just a big science fair project. 

Tue, 09/04/2012 - 21:52 | 2762973 SAT 800
SAT 800's picture

The Federal government is responsible for the crisis. Firstly in the person of Nixon, and his adviser, Friedman, who removed the gold regulator and weight, that prevented unlimited federal spending; and secondarily in the person of the congress critturs who introduced and voted on legislature over many years that made the madness possible. the Fed can be viewed as anoying and disfunctional, but utterly incapable of causing the crisis without the wholehearted efforts of the Federal Government to spend themselves into oblivion.

Tue, 09/04/2012 - 21:54 | 2762974 apberusdisvet
apberusdisvet's picture

The real reason is that the FED and its partners in crime have corrupted everything in its path through the power of money printing  to such a magnitude that the ownership of politicians, judges, The DOJ and even those in the Military Industrial Complex is now a foregone conclusion.  Gone is true capitalism, the Rule of Law, and sadly, the US Bill of Rights.

Wed, 09/05/2012 - 03:37 | 2763576 MiltonFriedmans...
MiltonFriedmansNightmare's picture

The alliance of the monetary and political "scientists" have corroborated to create a mutant version of Frankenstein's monster, a monster on steroids, that will eventually destroy the entire borrow a thought from TCFJI.

Tue, 09/04/2012 - 22:03 | 2762997 dick cheneys ghost
dick cheneys ghost's picture

Our monetary system is the disease

Tue, 09/04/2012 - 22:14 | 2763019 TheObsoleteMan
TheObsoleteMan's picture

No, our monetary system is only a symptom of our disease {moral decay}.

Tue, 09/04/2012 - 22:10 | 2763007 singsing
singsing's picture

Debt which can never be paid is made whole and money is debased.  Seniors are forgotten, the productive class is abandoned and our children are forever to be enslaved.  All to save monstrous financial bets and the paper wealth of lunatics.

This is the lagacy of central banks around the globe and the cowardly politicians who believe threats of mutually assured destruction.  Fools, the lot of them.   

Tue, 09/04/2012 - 22:10 | 2763010 TheObsoleteMan
TheObsoleteMan's picture

No, it is not the Fed's fault, it is OUR FAULT. The Fed is just a predatory animal, doing what predatory animals do, much like the way a lion hunts African plains game. It was our duty to either prevent it, or kill it once established. So far, we have failed on both accounts.

Tue, 09/04/2012 - 22:14 | 2763018 Caviar Emptor
Caviar Emptor's picture

Refusal to cut rotting limbs has allowed the rot to spread to the trunk. 

The corporate welfare state is an autocratic regime that permanently endows a parasitic aristocracy which saps the productive economy of vitality. 

The last 3 super-cycles of record breaking monetary expansion (through expansion of the debt), Fed activism and micromangement coupled with incestuous politics have only succeeded in making an epic, giant mal-investment. Taxpayers from current and future generations were conned into paying for the offshoring and downsizing of the American economy. Now the only thing left is for Americans to serve each other burgers and do each others' laundry

Tue, 09/04/2012 - 22:21 | 2763036 Michelle
Michelle's picture

Let's blame the Fed because it just FEELS SOOOO GOOOOD!!!

(Making an objective and logical argument to state otherwise in this current crazed environment seems ironically insane.)





Tue, 09/04/2012 - 22:34 | 2763049 ekm
ekm's picture

It was Nixon, not the Fed that got USA out of the gold exchange system. The Fed was ordered to monetize and the Fed obeyed.

It was the Congress that passed the Community Reinvestment Act in 1977. The Fed was ordered to monetize and the Fed obeyed.

It was Reagan who re-appointed Paul Volcker after he accepted to follow through with Reagan's order to kill inflation. The Fed was ordered to de-monetize and the Fed followed through. If Volcker did not accept, simple, Reagan would have chosen somebody who would accept.

The Fed is just a tool for politicians. They always act upon acts of congress or WH. Fed independence is inexistent, but the job of Fed chairman and Fed member carries extremely high academic status. That's the whole value of it. That's why Volcker who was chosen by Carter, wanted to re-appointed: ACADEMIC STATUS.


The Fed has only to options: Monetize and de-monetize. Anybody can do this job, the simplest job in the world. Monetize and demonetize, Monetize and demonetize, Monetize and demonetize, Monetize and demonetize, Monetize and demonetize, Monetize and demonetize, Monetize and demonetize, foreeeeeeeeeeeeever.


What's so difficult about it? Just follow orders and collect fees for speeches. Easy crap. Monetize or demonetize.



Hasn't anybody noticed that all Fed Chairman have been academics without any real life business experience? The reason: Easy to scare. Academics always shit in their pants. Thus, even praising Volcker is nonsense. He just followed orders. He switched overnight from Carter Democrat to Reagan Republican.

Tue, 09/04/2012 - 23:40 | 2763235 icanhasbailout
icanhasbailout's picture

A national bank is The One Ring to the Congressional Gollum, which in turn is enslaved by its adoration and devotion, joining the ranks of the faithless subjects of the Bank of Sauron and run on sentences everywhere.

Tue, 09/04/2012 - 22:50 | 2763103 YesWeKahn
YesWeKahn's picture

No, china was responsable for all the crisis USA ever had, the FED always saved USA afterwards.

Tue, 09/04/2012 - 23:11 | 2763150 LongSoupLine
LongSoupLine's picture

Is the Fed responsible?


Does the Pope shit in the woods?  Are bears Catholic?

Tue, 09/04/2012 - 23:29 | 2763199 q99x2
q99x2's picture

They are guilty as fuck dude.

Tue, 09/04/2012 - 23:34 | 2763216 Dr. Engali
Dr. Engali's picture

Off topic.....according to the DNC: "Government is the only thing we all belong to"


I don't know about the rest of you, but I am not the property of government.

Wed, 09/05/2012 - 07:40 | 2763821 King_Julian
King_Julian's picture

All your properties are belong to us. Bitchez!

Tue, 09/04/2012 - 23:54 | 2763259 Totentänzerlied
Totentänzerlied's picture

Wow, seems like everyone and their dog has their own version of THE reason everything's gone to shit.

The overgrowth of predatory centralized institutions combined with the shift in cultural and social values which follows a widespread increase in wealth would be a start. Institutions, once established have only one goal - self-perpetuation, the State is no different; as institutions grow and multiply larger they become more exposed to systemic risk, the system becomes delicate, so the state steps in and takes control (openly or in secret) of the most important institutions, centralizes and concentrates them, but this prevents those which should fail and be replaced from doing so, the institutions become institutionalized, society's dependence on them grows and the cost of their failure increases exponentially, the state devotes more and more energy to maintaining itself and its institutions, which have vastly exceeded their natural lives - causing the people to mistakenly believe that permanent institutions are part of the natural order, as is total dependence upon them, so much so that this belief comes to be taken as self-evident and categorical, increases of the credit-money supply (or debasement of the currency) is a second-order effect of this dynamic. All institutions eventually die, any given state is no different; the only questions are to what degree has this state fused itself to the social, cultural, economic, religious, et al institutions of its nation and how long beyond their natural lives have they been kept alive?

All talk of moral hazard, (systemic/counterparty) risk, black swans, new normal, regimes, and so on are merely hints of various aspects of this historic dynamic of institutions.

In a free market, institutions serve people; in an unfree market, people serve institutions. That the market is itself an institution has been argued many times; if it is, this would be a contradiction --- if one employs a flawed conception of the market as Hegelian utopia (or, operating in a dialectical fashion in accordance with the Hegelian Absolute), but it is no such thing. The answer to this question depends on your views of human nature (desire/need for goods) and scarcity (availability of desired/needed goods) - the machinations of which, when peaceful and voluntary, is the market. My view is that the market was not established by intentional human interaction (as an institution must be), rather it prefigures human interaction - it is a condition of human interaction, one of the contexts in which human interaction may occur.

Oops, I just expanded the universe of discourse faster and more violently than the Bernank's going to expand our money supply come the next QE.

Tue, 09/04/2012 - 23:58 | 2763266 Moon Pie
Moon Pie's picture

Monetary, schmonetary...

Dudes/Dudettes, this article lifts the skirt and shows the cottage cheese ass of our regulatory horse shit thats going on.  It all BANKS all the time...END THE FED....change the rule to FIVE years (currently one!) after yer dismissed from some fricking post...FT-TBTF! FUCK THEM!


Wed, 09/05/2012 - 03:46 | 2763583 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Interesting article moon, but none of it matters. The feeble laws that are on the books aren't enforced anyway. The judicial system just pissed all over the concept of segregated accounts. The corruption now runs so deep that the only solution (very possibly not a good one as a replay of the middle ages is one possible outcome) is a reset.

Wed, 09/05/2012 - 00:00 | 2763276 JGambolputty
JGambolputty's picture

The Fed was a key contributor to the crisis in at least three respects--(1) leaving interest rates too low for too long in the 2002-05 timeframe (you all knew that one), (2) failing to exercise the jurisdiction granted to it by Congress to regulate subprime lending operations, and (3) first adopting and then failing to modify the ill-advised Basel I capital regime which not only failed to prevent, but actually incentivized, banks to engage in off balance sheet activities such as securitization virtually without limits. It was the regulatory trifecta. The first was a failure in monetary policy, the second a failure of enforcement, and the third a failure in regulatory policy. Very hard to top that.

Wed, 09/05/2012 - 00:47 | 2763362 yogibear
yogibear's picture

Hang the treasonous bastards.

Wed, 09/05/2012 - 00:51 | 2763372 luckylongshot
luckylongshot's picture

What Jim Reid claims is simply untrue. If recessions were a natural economic feature they would occur regularly throughout history.However during the middle ages Europe operated for 500 years under a financial system where interest free money was issued by the government and the amount issued was linked to productivity. It was known as the Tally system and it operated so well that during this period there were no depressions and inflation was never an issue. It took the Banksters funding of Oliver Cromwell to overthrow the Tally system and place Europe again under the boot of the banksters.

Wed, 09/05/2012 - 04:14 | 2763609 dcb
dcb's picture

Of course the fed is at fault

Wed, 09/05/2012 - 07:09 | 2763759 blueridgeviews
blueridgeviews's picture

the reason the Great Financial Crisis was so deep


You use "was" like the GFC is behind us. We are in the middle of it and have just papered/borrowed over the innevitable contraction.

Wed, 09/05/2012 - 08:37 | 2763969 falak pema
falak pema's picture

Was Messalina responsible for her acts? 

Thu, 09/06/2012 - 01:45 | 2767126 agagshoes
agagshoes's picture

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