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Bad Money

Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
Nov 19, 2011delfon rated this title 4.5 out of 5 stars
A wonderful and insightful characterization of the changing economy. If anyone is wondering what is happening, Kevin Phillips stint in Republican ranks shows how another real Conservative views the momentus changes taken place. Finacialization he terms has changed the whole society -- and may lead us to where we do not wish to to. Much in the manner of Judts, Ill Fares the Land, or Mauldins "Engame" -- but, in respect to the latter, this author shows the real debt problems start with individuals who racked up tremendous debts in the 1987-2007 period ($11 Trillio to $48 Trillion). He posits the US is losing control over world events, with rising disrespect for US allegiance and fears of foreigner of a depreciating USD. The rise of a shadow banking system via pension funds,brokers,. The disaster that was promoted by a former Fed Reserve head. The manipulation of statistics (CPI, Unemployment) The threats of depegging of USD, Hidden money creation (M3),Highly endebted banks, the crescendo of US private debt soring throughout the world. As one top banker states and is quoted: the Federal Reserce has..."mismangaged the biggest risk of our times.....overtime America's bubbles have gotton bigger as have the segments of the economy they have created."... higher interest rates are needed --- to "break the endless chain of asset bubbles",,, S. Roach, chairman, Morgan Stanley.. In summation, the author postulates.....5 things that characterize this era. 1)-the financializing of a hiterto (formerly) more diversified ecomony. 2)-using massive debt to do so. 3)-following up stock market bubbles with other bubbles (a larger housing and mortgage one for sure). 4)quadrupling US credit-market debt between 1987-2007 5)and consumating these events with a mixxed performance of dishonesty, incompetence, and quantitative negligence. Asia is the biggest gainer, but whether an Anglo led exconomy just dies out is up for debate, for there is no main candidate for leading the world (Singapore, Hong Kong, Tokyo Shanghai??) However, he points out, no previous world economic power has engaged a full-fledged economic renaissance after becoming unduly enamoured of finance. This is quite the expose and gives one pause to reflect on investments, living arrangements, careers and life choices. ..