This Crisis Was Foreseeable … Thousands of Years Ago

Economists, Military Strategists and Others Warned Us … Long Ago

We’ve known for 5,000 years that mass spying on one’s own people is always aimed at grabbing power and crushing dissent, not protecting us from bad guys.

We’ve known for 4,000 years that debts need to be periodically written down, or the entire economy will collapse. And see this.

We’ve known for 2,500 years that prolonged war bankrupts an economy.

We’ve known for 2,000 years that wars are based on lies.

We’ve known for 1,900 years that runaway inequality destroys societies.

We’ve known for thousands of years that debasing currencies leads to economic collapse.

We’ve known for millennia that torture is a form of terrorism.

We’ve known for thousands of years that – when criminals are not punished – crime spreads.

We’ve known for hundreds of years that the failure to punish financial fraud destroys economies, as it destroys all trust in the financial system.

We’ve known for centuries that monopolies and the political influence which accompanies too much power in too few hands are dangerous for free markets.

We’ve known for hundreds of years that companies will try to pawn their debts off on governments, and that it is a huge mistake for governments to allow corporate debt to be backstopped by government.

We’ve known for centuries that powerful people – unless held to account – will get together and steal from everyone else.

We’ve known for hundreds of years that standing armies and warmongering harm Western civilization.

We’ve known for over 300 years that going into debt to pay for war ruins any nation.

We’ve known for 200 years that allowing private banks to control credit creation eventually destroys the nation’s prosperity.

We’ve known for two centuries that a fiat money system – where the money supply is not pegged to anything real – is harmful in the long-run.

We’ve known for 200 years that a two-party system quickly becomes corrupted.

We’ve known for over a century that torture produces false and useless information.

We’ve known since the 1930s Great Depression that separating depository banking from speculative investment banking is key to economic stability. See this, this, this and this.

We’ve known for 80 years that inflation is a hidden tax.

We’ve known for 79 years that war is a racket that benefits the elites but harms everyone else.

We’ve known since 1988 that quantitative easing doesn’t work to rescue an ailing economy.

We’ve known since 1993 that derivatives such as credit default swaps – if not reined in – could take down the economy. And see this.

We’ve known since 1998 that crony capitalism destroys even the strongest economies, and that economies that are capitalist in name only need major reforms to create accountability and competitive markets.

We’ve known since 2007 or earlier that lax oversight of hedge funds could blow up the economy.

And we knew before the 2008 financial crash and subsequent bailouts that:

  • The easy credit policy of the Fed and other central banks, the failure to regulate the shadow banking system, and “the use of gimmicks and palliatives” by central banks hurt the economy
  • Anything other than (1) letting asset prices fall to their true market value, (2) increasing savings rates, and (3) forcing companies to write off bad debts “will only make things worse”
  • Bailouts of big banks harm the economy
  • The Fed and other central banks were simply transferring risk from private banks to governments, which could lead to a sovereign debt crisis

Postscript:  Those who fail to learn from history are doomed to repeat it … and we’ve known that for a long time.

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  • Wrong Em Boyo

    Someone better go take down that ISIS flag from the roof of the Pentagon…

    http://www.liveleak.com/view?i=75c_1416348099

  • john

    Who is this “We”?? Speak for yourself. It’s obvious that not every person in the U.S. knows these things, no, not nearly anybody since these things continue to happen. If “We” truly knew these things, then these things likely would not even be a problem today.

    • Carl_Herman

      “We” is any number from two people to above. It’s obvious that “we” does not mean every person in the US.

      “We” are an Emperor’s New Clothes community. When the tragic-comedy is ended, it will happen just that fast.

      And what will you do to help produce this outcome?

      • Man on the street

        To worry about the collapse of our dollar is something, but to worry that the neocons will ignite a nuclear war between us and Russia is existential. Where is the sense of outrage? When Bush wanted to invade Iraq there were many people in all Western capitals who protested. Fast forward a couple of years ago, when France and America started to bomb Libya, there was complete silence. The Western population in general became war mongers?

    • marlene

      Good point. Every legal American citizen needs to know what’s written in this article. It should be taught in schools, but that’s not going to happen since we’re being deliberately kept in the dark. Share this with your friends. i know i will print it and put it in a visible place. You’re correct in stating that knowledge is power and these things would not have occurred if we the people had known this before we were dumbed down.

  • jadan

    What we know about “fiat” money is that it has served nation states well from the Roman Republic to the US during the Revolution and the Civil War. There have been examples of egregiously mismanaged fiat currency, but this happens because of lawless behavior. What do you propose as a “backing” for fiat currency, kumquats, pig’s ears, pretty gravel, silver, gold? How about the productive capability of the US economic muscle and the lawful behavior of its institutions? No monetary scheme, gold & silver or fiat can survive corruption and lawlessness. That is what is destroying these united states, not fiat currency.

    • Anon

      You are correct, at bottom, it’s the corruption in the District of Criminals and on Wall St., that is at the ROOT of the problem. However, it is ALSO privately-owned foreign Central Banks which own the so-called “Federal” “Reserve”. The USD (U.S. Dollar) or FRN (“Federal” “Reserve” Note) isn’t created solely by the United States Treasury, with NO INTEREST attached. No, it is the product of FOREIGN CENTRAL BANKERS, who own the so-called “Federal” “Reserve”. First, we must END THE “FED”! Then, we must begin dealing with the CRIMINALS in the District of Criminals and on Wall St., such as by restoring Glass-Steagall, etc. Prosecutions must follow the letter (and spirit) of the LAW, not some Western International Central Banker’s idea of what is “politically correct”.

      • Anon

        As you say, fiat currency served nation states well, such as during the American War of Independence (from England), and during the U.S. Civil War – however, we must NOT forget that Benjamin Franklin said, that the real reason for the American Revolution, was that King George III wouldn’t let the American Colonists print and use their own “scrip” – currency. Also, the Rothschilds (out of the ‘City’ of London – London’s Financial District) offered Abraham Lincoln a loan, during the Civil War, at 30% interest – which Honest Abe REFUSED. President Lincoln printed up “green-backs” through the U.S. Treasury, with NO INTEREST to foreign Central Bankers! JFK did the same, when he printed/coined $4 Billion USD, via the U.S. Treasury, with NO INTEREST attached to foreign Central Bankers. Well, all know what happened at Ford’s Theatre, and in Dallas, on Nov. 22, 1963. The currency of We, the People of these United States of AMERICA – should be printed/coined through the United States TREASURY, AT NO INTEREST! (No interest to foreign Central Bankers).

    • Gil G

      I’m sure many a Libertarians has answered that nothing replaces the national currency rather people are free to use whatever they want as currency whether it be precious metals, gemstones, rum bottles, eggs, cigarettes, etc.

  • Carl_Herman

    GW, this is awesome work, bro. If we ever win this thing, you deserve as much vacation as you wish!

  • marlene

    An awesome article. Thanks for the informational time line, the chronological listing of every critical event, and the links. I will save and share this.

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  • RedScourge

    I have to disagree with the Great Depression point though. Frequent bank failures are an important part of banking, because without the fear of losing one’s life savings, customers will not demand that the management prove to them the soundness of the bank. The more the government promises to bail out the banks, the more huge risks they’ll take on in the hopes of earning bigger and bigger profits. This is plain old economics at work here. If you remove all risk, risk tolerance scales up to infinity. If you refuse to remove any risk, risk tolerance becomes low.

    The Great Depression was largely the product of the manipulations of the Federal Reserve, and the US federal government insisting on trying every move out of the socialist playbook to try and bring a premature end to a recession that needed to happen to purge gross malinvestment from the economy. Infact, before the government started to act, the unemployment rate was actually starting to fall, signaling that the worst was already over.

  • DK MIR

    What are we going to do after knowing all this historical fiasco?

  • Bob Smith

    We have known for ever that when leaders of a country become liars, cheats, and totally immoral, then many of the average citizens tend to follow that example.

  • Man on the street

    To the readers who know enough to help answer my questions.
    I have a favor to ask you. Is it possible that you answer my puzzlement regarding the Federal Reserve Bank.

    1- The Feds are for profit? Who own the Feds and the percentage of each owner?

    2- The treasury department prints our currency? Is that with permission from the Feds?

    3- The President chose the head of the Feds? Is that by approving a name given to him by Feds insiders?

    4- When the US needs an extra trillion dollar to wage a war or do something else, they ask the Feds for a “loan”? Do the Feds have this kind of cash to lend, or do they click on the computer mouse to raise America’s debt from 16 to 17 trillion?

    5- Is it possible for the people who run America if they need an extra trillion dollars to bypassed the Feds by clicking on their own mouse?

    6- What if the U. S. Refused to pay the Feds back on the debts or the interest on that debts? Can this little old lady who run the Feds send some goons to brake Obama’s knee caps knowing that he has the biggest arsenal of nukes?

    7- What is the difference between our debts to the Feds and our debts to the Chinese or other major holders of our bonds/treasury?

  • Man on the street

    I have a favor to ask you. Is it possible that you answer my puzzlement regarding the Federal Reserve Bank.

    1- The Feds are for profit? Who own the Feds and the percentage of each owner?

    2- The treasury department prints our currency? Is that with permission from the Feds?

    3- The President chose the head of the Feds? Is that by approving a name given to him by Feds insiders?

    4- When the US needs an extra trillion dollar to wage a war or do something else, they ask the Feds for a “loan”? Do the Feds have this kind of cash to lend, or do they click on the computer mouse to raise America’s debt from 16 to 17 trillion?

    5- Is it possible for the people who run America if they need an extra trillion dollars to bypassed the Feds by clicking on their own mouse?

    6- What if the U. S. Refused to pay the Feds back on the debts or the interest on that debts? Can this little old lady who run the Feds send some goons to brake Obama’s knee caps knowing that he has the biggest arsenal of nukes?

    7- What is the difference between our debts to the Feds and our debts to the Chinese or other major holders of our bonds/treasury?

  • john

    Ho-hum. What else is new? The simple fact of the matter is our grandchildren (and even some of our children) will find themselves going to East Asia in search of menial jobs that “Chinese, Koreans, Thais, and Japanese don’t want to do.”

  • Anthony Freda

    Brilliant. Should be mandatory reading for every child in the government prisoner training facilities. (aka public school.)

  • Jocanda

    This PROVES that as a species we’re STUPID! We never learn….

  • Greg Burton

    We fight an ancient evil. But, we have a choice: apocalypse dark, or apocalypse light?

  • Gordon Johnson

    Interesting how people dismiss historical political documents limiting Government’s abilities to do these things as “archaic” and “not in step with the times”.
    Or maybe they don’t care what the consequences are. Or maybe they simply want to enjoy a good ride, betting that they will pass on before the bill comes due? And so they’ve worked hard trying to sell everyone else on the same?