The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
The Current Crisis—Causes and Consequences
The house of cards built on easy credit has finally come tumbling down, triggered by the failure of one of the most flimsy of the cards, subprime mortgages. We’ll look at the causes—it’s important to understand causes if one has any reasonable chance of analyzing the present and assessing the outlook—and weigh the likely outcome of our government’s actions.
Not to keep you in suspense any longer, we believe the bailout and associated actions, adding yet more credit to an economy already over-ripe with easy credit, far from solving the problem (i.e., getting banks to lend again), will make matters ultimately worse, by postponing the necessary adjustments, building up inflation, and destroying the dollar and its purchasing power, devastating savers and undermining the foundations of the economy.
