Comment: The inside Job

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The inside Job

Don’t really want to disagree with what you have said here because the premise is correct. If you had said that you “cannot deregulate a system inside a cartel” it may be more correct. I.E. you cannot deregulate the creation of money and credit inside the Federal Reserve System because the system is a privatization of profit with the socialization of losses…..But the responsibility clearly lies at the feet of the United States Government. Their reason for the system is because it allows the USG to live beyond it means through the taxation of inflation and crony capitalization for which gives the politicians access to enrich themselves.

The definition of Corruption is
“The intrusion in to the free market through government regulation”

A couple of things I will take issue with ……one is this statement from the article from the link to your website.

It’s also important to remember that nobody forced Wall Street to BUY worthless subprime loans, securitize them, leverage them 50 to 1, put fraudulent triple A ratings on them, and sell them around the world.

Actually there was “someone” that forced the Banks to do this……it was the USG. There was meeting on April 28, 2004 where the USG brought all the Banks together and basically told them to “leverage up their balance sheets” because Fannie and Freddie where just opening up about their accounting scandals and the USG knew they were going to have to bail them out and without Fannie and Freddie (Qusi-central banks) in the market place they had to find others to keep the economy going.

If you want the most accurate picture of what caused the financial crisis the movie “Inside Job” got the closest aleast of the public information. But that really is only a study of the “System” mentioned earlier. The only real way to prevent a crisis is to “never let it develop” in the first place and never let the system to be created, the “free market” and private money is the only real answer.

Another thing is not derivatives are created equal. The notional values of credit and currencies derivatives are not the same as the insurance products of credit default swaps, not to mention the illegal aspect of insuring someone else’s property which the USG encouraged.

As far as de-regulation of derivatives not being a good idea i would agree but it's not the linch-pin, the real problem developed in the early 1980’s when they de-regulated the securitization process. It made way for the shadow banking system and the loss of control in credit creation……which was huge inflation.

"Before we can ever ask how things might go wrong; we must first explain how they could ever go right"