Zombieland learned nothing from 2008. Less than nothing really. So it's guaranteed to happen again - it would be impossible for it not to happen. Cheap money was at the root cause of the financial crisis, and since that fiasco, money has only gotten progressively cheaper...Globalization's two primary exports are cheap junk and cheap money. Breaking it down in a way that even a zombie can understand - cheap money comes from Third World factory slaves who subsidize our standard of living - both through suppressed wages and reverse capital flows. Taking that cheap money to buy the bigger house and bigger car, under the premise that "it can't happen to me", is the Faustian assumption. Believing that "there's no subprime here" is the moronic assumption. In combination, these assumptions will bury anyone who believes them...
The Big Short
In all fairness there's no way the average person is going to understand all of the crazy fucked up financial weapons of mass destruction dreamed up by Harvard's "best and brightest" on Wall Street during that quaint 2007 era. After all, half of Wall Street blew themselves up because they themselves didn't understand it. Then again, there's the basic fact that the surviving half of Wall Street made a massive profit by betting against homeowners and then were bailed out by those same homeowners - receiving 100 cents on the dollar, compliments of the taxpayer. And then there's the other unavoidable fact that combined deficits in the U.S. alone since 2008 equate to $7 trillion, making liars out of every apologist dumbfuck who says that the "bailout" was repaid
Only One Lesson to Learn from 2008
Still, there was only one lesson that the stoned Idiocracy themselves had to learn from 2008 which is that cheap money aka. 1% "Patriot Loans" leads to malinvestment, asset bubbles, followed by inevitable asset crashes. One basic lesson. It was all packaged under the pseudonym "subprime" but the reality is that subprime was merely the epicenter of a much larger problem.
The Jedi Mind Trick: "There's No Suprime Here"
However, by cleverly packaging that era's entire financial crisis under this term "subprime" the ever-gullible masses were Jedi Mind Tricked into believing that the problem had been fixed. It's easy, just don't give $750k mortgages to illegal aliens making $2/hour. Problem solved. What's on TV? And around the world, it's much the same thing. Most countries outside the U.S. (e.g. Canada) don't use this term "subprime" to describe people with low credit scores gaining access to ludicrous amounts of money that they can use to tie around their neck and go bungee jumping off a bridge. But since it's not called " subprime", clearly there's no risk of another 2008.
"The Global Savings Glut"
This is how Bernankenstein describes Globalization and its resulting massive inflow of cheap money: instead of describing it as a Ponzi Scheme or a human exploitation machine - using terms only a Central Bankster would love, he said that Globalization has caused a "savings glut" among Developing nations. Apparently factory slaves making $.80 per hour like to save too much. Overborrowing and fiscal profligacy in Developed nations is not a root problem. Zero percent interest rates and massive incentives to borrow, combined with massive trade deficits (aka. current account deficits) and industrial arbitrage (aka. outsourcing) play no role in this equation.
The reality is of course, it's just opposite sides of the same coin. Third World nations "over-save" so that the Developed nations can overconsume. None of it makes sense. None of it is healthy. None of it is sustainable. Central Banksters made the problem far worse by taking full advantage of the savings glut by lowering interest rates to 0%. They took full advantage of the inbound deflation and corresponding capital flows from the Third World to give the Middle Class a long rope they could wrap around their neck yet again.
Below shows how Central Banks "fixed" subprime resulting from post-9/11 1% "Patriot Loans". They lowered interest rates to 0% and lent out 25x more money. Problem solved. What's on TV?:
"It's a good thing there's no subprime here"
Right. Instead of individual homeowners being subprime, entire nations are subprime now.
"It's a good thing there's no subprime here"
Right. Instead of individual homeowners being subprime, entire nations are subprime now.
Occupy the Couch and the Refrigerator
Subprime, CDS Derivatives, HFT, Convenant Lite Loans.
None of these have been fixed since 2008, because structurally nothing has been fixed since 2008. Even subprime lending is now coming back. The dumbfucks at large had their chance to reform Wall Street during the "Occupy Wall Street" movement. OWS sprang up in September 2011 right after the debt ceiling debacle, U.S. debt downgrade and the summer meltdown which lost 20% on the Dow in three days. The general response from the aging E-Traders at large was "what do they want, anyway?". The whole movement was regarded as a nuisance. Besides how could OWS ever compete with "Storage Wars", "Breaking Amish", "Extreme Couponing" or "Say Yes to the Dress" ? It had no chance.
We live in the most dangerous period in modern history, being stewed to oblivion in the cauldron of the "obvious", while the stoned dunces at large make their moronic Faustian assumptions which this time will bury them so fucking deep it will take an archaeological excavation to find them.
"Everyone Gets Their Day in the Sunshine"
In 675+ blog posts over seven years, I still haven't managed to sum up this fucked up era as eloquently as the Irishman in the street. Suffice to say, in layman's terms the stoned Zombies at large are fully capable of understanding the risks of cheap money, but still they choose to ignore them:
