Talkin’ About My Revolutions

The initial financial crisis of the past two years has planted seeds for two new crises: rising government debt and inflation. A third crisis will occur when confidence is lost in the US dollar as world reserve currency. And as former Assistant Secretary of the Treasury Paul Craig Roberts points out, the real American crisis is the offshoring of US manufacturing, industrial, and professional service jobs.

Is the financial crisis over? Is the recovery for real and, if not, what are Americans’ prospects? The short answer is that the financial crisis is not over, the recovery is not real, and the U.S. faces a far worse crisis than the financial one. Here is the situation as I understand it:

The global crisis is understood as a banking crisis brought on by mindless deregulation of the U.S. financial arena. Investment banks leveraged assets to highly irresponsible levels, issued questionable financial instruments with fraudulent investment grade ratings, and issued the instruments through direct sales to customers rather than through markets.

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