Sure, relaxed rules on home ownership were a contributing factor to the downfall, but that was a symptom of the disease of easy credit, not the sickness itself.

Meh. This depressing tale leaves plenty of blame to go round. Ultimately, the dance takes two:lender and borrower. Excoriate the market all you want and won’t hear me disagree. But leave borrowers off the hook and I’ll be right there to call you out.

A HUGE part of the whole sickness was people taking out loans they couldn’t afford to pay back. I don’t let people off the hook because they were duped and sold a bill of goods by “predatory lenders.” If you borrow half a million dollars without making a serious concerted effort to understand all the risks, shame on you.

Easy credit has become a problem. We’re addicted to it. The only cure left will be quite painful: inflation due to a debased dollar will lead to much higher interest rates sooner or later. Becuase the entities that save more than they spend will be the only ones able to grant loans, and they’ll figure out that we have become a terrible risk, and a drag on the system of global productivity.

America borrows to consume while other countries produce and save. We’re like f&*king locusts.

In this first part, note around the 4:15 mark how the era of easy money was at its worst during the period from 2002 to 2006.

You could even start a bit earlier, at around the 1:40 mark and listen to how the government encouraged risky lending through Fanny & Freddy.

One must acknowledge the fact that nonoe of this would ever have been possible if money did not become easy in 2002, and interest rates were set by the free-market, rather than the Federal Reserve’s manipulation. The debate over regulation is a side effect of government intervention in our monetary system; it is a moot point.

There is only one other period in American history when money was cheaper and “easier” than it was in 2002-2006. That period is today. Interst rates are zero. It cannot get any cheaper or easier than this.