Jesse's Café Américain: "The credit crisis was caused by a long period of negative short term interest rates, excessive money supply growth, reckless credit expansion, insufficient reserves and over leverage. The regulatory process became hopelessly ineffective and co-opted. Key safeguards that had been in place since the 1930's were brought down through conscious and well-funded lobbying.
The banks think that they have established the principle that if they over borrow enough, if they are reckless enough, if they expand enough, they become 'too big to fail' and their losses will be borne by the taxpayers and all holders of the currency, while they keep their personal profits and bonuses.
The Fed would like to introduce some 'turbo-charging' to that money-printing machine, cry 'Fiat!' and unleash the dogs of leveraged credit expansion and monetary inflation. This is going to be interesting...."
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