"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."
- Ludwig von Mises

Saturday, December 4, 2010

Don't Forget, We Have Already Recently Stared Into the Abyss

Many of you have already seen this clip, but I still believe it is worth remembering.  As you may recall, the current (ongoing) crisis flared up in the Fall of 2008.  US Congressman Paul Kanjorski, who then held the Capital Markets Subcommittee Chair, describes in this interview the chain of events that transpired in 2008.

Recall, the Fall 2008 crisis was about buying up subprime mortgages and stopping the derivatives market from imploding, and taking down the entire global financial system.  But recently released information (The Fed's global lending spree of $3 trillion) tells us that things were much worse.  And now, we no longer are faced with just a mortgage crisis, or a banking crisis, but a sovereign crisis.

I bring this clip up for those that have not seen it before, and as a reminder to those that have.  But there is one more reason I bring this up.  How is Europe reacting to its crises?  Is there really a focused crisis management policy, or are European leaders reacting to both the crisis and the competing interests of its member states?

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