Who's to Blame for the Economic Collapse?

Of course the Federal Reserve who was brought into power by stealth and is not very Federal at All, but privately owned mostly by british banks. Rothschilds?

During the great depression, a noble prize winner in economics, showed how the economic cycle of: recession, depression, boom, peak was all controlled by the policies of the FED.

Meanwhile Baron Rothschild along with Prime Minister Gordon Brown call for "New World Order and Global Governance"

Exciting stuff! Can't Wait!

Who's to blame?
Selfish people.

More importantly dumb people.

People who didn't know how to save.

Everyone . . . that’s my take on it.

When you look at everything that’s transpired, you can see that the rungs on the ladder of blame are many and varied but what it boils down to is greed.

Now, greed isn’t necessarily a bad thing, depending on how it is defined. For the purposes of this diatribe, I’ll define greed as everyone’s desire to have a bit more than the last person . . . one of the basic tenets of existence is for each generation to do a bit better than the last. Our parents tried to do that for us, their parents tried to do that for them and our kids will probably try to do that for their young-uns.

That greed then becomes the impetus behind growth. In order to have more, you need to grow . . . the economy, the manufacturing base, the resource base etc. etc. etc. The unfortunate thing is that growth for any entity is ultimately unsustainable.

Look at this whole subprime, credit crunching insolvency mess.

All of us strove to get more . . . we wanted more ‘stuff’ so the banks saw an opportunity to lend more money which gave retail the ability to sell more stuff, manufacturers the ability to make more stuff, the construction industry the ability to build more stuff, all for us to . . . well . . . you get the drift.

In this, there are naturally those who are going to want more than more. They are present in every strata of our socioeconomic structure . . . up until 2008, they were the go getters, the leaders or whatever you wanted to call them, but they were the impetus behind our growth.

In generations past, it was predominantly cash driven. The past couple of generations have done it pretty much on credit. (Consumer credit card debt is estimated at $900 billion in the US alone . . . that’s staggering). Don’t get me wrong, there is a train of thought that credit isn’t a bad thing in moderation, but that continued race to get more eventually became fully funded by consumer, corporate and government debt.

Instead of putting the reigns to it at a reasonable point, ‘greed’ overtook common sense. Banks wanted more revenue from interest, manufactures wanted higher profits and we all wanted the shiniest and newest stuff . . .

In terms of dealing with all this credit, all the banks had to do is bundle up a bunch of debt, and sell it to investors as 'mortgage backed securities', 'collateralized debt obligations', 'Jimbo's pack of crappy debt' or some other such nonsensical but delightfully commercially technical name.

In most cases, the security was in the houses, properties and businesses that served as collateral. Then came the onset of 'no down payment' home ownership, adjustable rate mortgages, NINJA loans, free-and-easy credit we had a skewed ratio of debt to security.

From that silliness came 'credit default swaps' which basically served as insurance for those who speculated on the abilty of everyone to pay back this debt. The problem is, there was no regulatory system put in place as a watchdog to keep things in check when it came to trading in those securities. Why would anyone want that anyway . . . it would only serve to slow the system and dash the expectations of all parties to get a bigger slice of the pie . . . to have a grander pile of stuff . . . to not just be ‘a bit’ better than the last generation rather leaps and bounds ahead of them.

That drove up prices of assets held as securities.

As an aside, but germane to this blather, I was watching Flip That House the other day. They filmed a prospecting owner sitting at their kitchen table with a stack of credit cards figuring out how much credit they had available to finish their project. They had $51,000 available credit left and they’d been burning up the plastic funding the project to that point. By the end of the show, they had used up most of that credit and were unable to sell the property because they went a tad overboard in their renovations.

In tallying it all up at the end of the show, they failed to add the fact that the prospector was paying interest on an amount in excess of $51,000 . . . I’ll hazard a guess that this wasn’t the only one in the US with that kind of credit card debt . . .

Anyway, when the real estate, manufacturing, retail and investment bubbles burst, the value of ‘security’ backing these debts dropped like a teenagers pants on prom night leaving the debt to asset ratio out of whack heavily in favour of debt.

That's when the defaults started and grew from a snowball to an avalanche.

The gatekeepers of the system, the muckity-mucks who were supposed to be watching things such as debt to asset ratios and monitoring the soundness of this debt fell victim to the same greed. The more of these 'securities' they could get their hands on, the better it appeared they were doing, thus they were rewarded through bonuses and the like to continue to absorb these securities into their portfolios.

Clearly, sanity through putting the brakes on the ever-growing portfolio of unsupported debt was not financially lucrative who, through greed, ended up looking out for themselves instead of doing their jobs.

When the turds hit the oscillator, those in positions of responsibility (Congress, Senate, Cabinet, President) in the same greedy protect my own pile of stuff interest to which every other level of strata fell victim, took hold.

Instead of worrying about main street, clearly Wall Street took precedence as it is those coffers that fund election campaigns and the like.

So in my humble opinion and from a systemic view culpability in this lies from top down, bottom up or however you want to put it, we’re all responsible for this in varying degrees. Yes, there are some out there who never bought into all of this crapola hype over more stuff and continue to live within their means. But, they are few and far between.

For the rest of us, the sooner we all fess up to this, the better.

Unfortunately, the solution to the problem currently seems to favour a relative few who, to this day, still won’t fess up to their part in this slow motion train wreck of our system.

What he said ^.

Everyone with a debt has a part in blowing the bubble, the deed is done even when it is done in ignorance of the bigger picture. Of course it has more more aspects on it making it possible to shift a bigger quantity of the blame to the masterminds in question but it is still a team-effort so to say.

Education had to be in such a form that people know enough to do their jobs but know to little to percieve the bigger picture of the society they life in.

Media creates the artificial urges to buy more, faster and give you the option to create a debt. Commercials, programming and a myriad of other tools have been employed to this effect.

The time you spend working and not thinking about the global state of affairs is in a big part artificially created imo, in concert with the first two. So people do not have time to think to deep about the whole thing.

In the end we let it happen but the set-up was brilliant from a impartial point of view so we have to get smarter and more self-responsible fast to break this cycle or prepare to be perpetually clusterf*cked for a longer time than needed.