IT'S DIFFERENT THIS TIME... HONEST!
HERE'S WHY:
1. THERE HAVE BEEN YEARS AND YEARS OF "PLUNGE PROTECTION" AND "MANAGED MARKETS" BY THE FED AND TREASURY...WHICH HAVE PREVENTED THE NORMAL PURGE OF BAD ASSETS AND BAD DEBTS FROM THE SYSTEM... ODDLY WE ARE EVEN SEEING IT NOW! IN THE EXTREME SITUATION IN THE CREDIT MARKETS...! MASSIVE GOVERNMENT INTERVENTION....
THIS IS THE FIRST TIME SINCE PERHAPS THE SOUTH SEAS BUBBLE OF 1720 THAT THE GOVERNMENT WAS AN INSTIGATOR AND PROTECTOR OF A MAJOR BUBBLE.
THE MOTIVATION WAS TO KEEP THE PUBLIC INTERESTED IN 401Ks...AND SELF FUNDED PENSIONS... BUT ALSO THE USUAL GREED AND CORRUPTION THAT IS NORMAL IN POLITICS...
2. NEVER BEFORE HAS A GOVERNMENT DELIBERATELY "DE-INDUSTRIALIZED" ITS ECONOMY... TRADITIONALLY TARIFFS WERE USED TO PROTECT LOCAL ECONOMIES...AND AVOID THE KIND OF HOLLOWING OUT THAT HAS BEEN DONE IN AMERICA TODAY...
WHY DID THEY ALLOW THIS...?
3. WELL, PERHAPS THE DOLLAR EXCEPTIONALISM THAT KEYNES INSTITUTED DURING THE BRETON WOODS DAYS...COULD BE THE REASON THAT THE US GOVERNMENT AND THE US FED THOUGHT THE NORMAL ECONOMIC RULES DID NOT APPLY TO THE AMERICAN ECONOMY...
AMERICAN EXCEPTIONALISM HAS BEEN THE RULE IN THE GLOBAL ECONOMY SINCE 1945...AND IT HAS BEEN ABUSED BY WASHINGTON MIGHTILY...
MY SENSE IS THAT IF THE "SPELL" OF AMERICAN EXCEPTIONALISM IS BROKEN...AND THE NATIONS OF THE WORLD GO THEIR SEPERATE WAYS WITHOUT AMERICAN LEADERSHIP... THE US ECONOMY COULD COLLAPSE IN A VERY DAMAGING WAY FOR AMERICANS...
SO BLAME BRETON WOODS...AND THE EXCEPTIONALISM THAT THAT FOSTERED...INCLUDING THE DELIBERATE DE-INDUSTRIALIZATION OF THE US ECONOMY WHICH MADE THE TRADE DEFICITS "STRUCTURAL" AND THEREFORE UNSUSTAINABLE BY DEFINITION...(UNLESS THE EXCEPTIONALISM COULD BE MADE "PERMANENT!)
AND THE MANAGED MARKETS WHICH DID NOT ALLOW NORMAL BUSINESS CYCLES TO PLAY OUT...
AND FINALLY THE GREED AND EXTREME CORRUPTION IN WALL STREET AND WASHINGTON IN THE FINAL DAZE OF THE IMPERIAL AMERICAN ECONOMY... HUBRIS GOES BEFORE THE FALL...
NOW ALAS, THE AMERICAN ECONOMY IS HISTORY I AM AFRAID TO SAY..!
