Theodore's World: Documentary Film ....OVERDOSE: The Next Financial Crisis

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September 19, 2010

Documentary Film ....OVERDOSE: The Next Financial Crisis

This movie on the causes of the financial crisis was produced in Sweden by Henrik Devell, directed by Martin Borgs, and narrated by Johan Norberg, a Senior Fellow at Cato Institute.

Here is a description of from their web site:

In times of crisis people seek strong leaders and simple solutions. But what if their solutions are identical to the mistakes that caused the very crisis? This is the story of the greatest economic crisis of our age, the one that awaits us.
When the world’s financial bubble blew, the solution was to lower interest rates and pump trillions of dollars into the sick banking system. “The solution is the problem, that’s why we had a problem in the first place”. For Economics Nobel laureate Vernon Smith, the Catch 22 is self-evident. But interest rates have been at rock bottom for years, and governments are running out of fuel to feed the economy. “The governments can save the banks, but who can save the governments?” Forecasts predict all countries’ debt will reach 100% of GDP by next year. Greece and Iceland have already crumbled, who will be next?
The storm that would rock the world, began brewing in the US when congress pushed the idea of home ownership for all, propping up those who couldn’t make the down payments. The Market even coined a term, NINA loans: “No Income, No Assets, No Problem!” Enter FannieMae and FreddieMac, privately owned, government sponsored. “Want that vacation? Wanna buy some new clothes? Use your house as a piggie bank!” Why earn money to pay for your home when you can make money just living in it? With the government covering all losses, you’d have been a fool not to borrow.
The years of growth had been a continuous party. But when the punchbowl ran dry, instead of letting investors go home to nurse their hangovers as usual, the Federal Reserve just filled it up again with phoney money. For analyst Peter Schiff, the consequence of the spending binge was crystal clear: “we’re in so much trouble now because we got drunk on all that Fed alcohol”. Yet along with other worried experts, he was mocked and derided during the boom.
Have you taken out a mortgage, invested capital or bought shares? If you have, likelihood is you lost out in the latest bust. Governments promised decisive action, the biggest financial stimulus packages in history, gargantuan bailouts: but what crazed logic is this, propping up debt with…more debt? This documentary brings an entirely fresh voice to the hottest topic of today.


Wild Thing's comment........

Of all the presidents our country has had NO one has done more damage then Obama and NO party has done more damage then the democrats. And sadly and with extreme outrage this has all mostly been done since the Dems gained the majority in both houses and then when Obama got in our White House.

.... Thank you Jim for sending this to me.

Posted by Wild Thing at September 19, 2010 05:47 AM


I worry about what will happen in the next few years as a result of Democrat policy. Will we have massive inflation or massive deflation? It is frightening to think of what either will do to our econmy and how many more jobs will be lost.

Posted by: TomR,armed in Texas at September 19, 2010 11:44 AM

Tom, I do too, it really is shaky ground and I never felt like this before.

Posted by: Wild Thing at September 19, 2010 07:13 PM