The news story regarding the current monetary crisis in Cyprus is just the latest bad news in a long list since the start in 2007. If you are sitting comfortably I will begin...
Once upon a time greedy, selfish & stupid bankers thought up a good wheeze to make lots of money, (for themselves). There was a real estate bubble & house prices had risen to unheard of heights. Clever financiers decided that everyone, even those who couldn't afford it, should be given money to buy a house. They called this "Sub Prime" lending. A better title would be "the Emperors New Clothes".
The forclosures resulting from this started the whole "Credit Crunch" and led to mega bank failures & a huge asset decline in value which has affected everyone worldwide. Underlying this was a spectacular failure in financial regulation, which allowed excessive risk & borrowing.
But it wasn't just the naughty bankers. It was us too. We had got used to living on credit cards & spending more than we could afford. We wanted "stuff" & we wanted it now. The nasty banks quite liked that because it meant lots of interest when we couldn't pay off our debts. So in effect the whole culture of the developed world was deeply flawed.
In reality the developed world is now insolvent. The debt liability is beyond comprehension. In order that we simple folk won't really understand what is actually happening, a whole new vocabulary has been invented by these clever financiers. "Quantitative Easing" just means printing lots more money we haven't really got.
http://en.wikipedia.org/wiki/Causes_of_the_2007%E2%80%932012_global_financial_crisis Wikipedia, as always, gives more detail.
Where do we go from here? I don't know, but I'm not optimistic. Who can we really trust to give us the real facts? Not bankers, or politicians, or even the media. We have reached a stage of complexity in the developed world where I fear we are set on a course it will be almost impossible to recover from.
This isn't a fairy story - there is no happy ending.
http://sorisomail.com/email/238743/o-politico-que-representa-realmente-a-populacao.html A friend sent me this - thank god I'm not alone.
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