Great stuff. I particularly liked his comments re Chifley and his predictions re the future results of the Bretton-Woods "agreement"

The other posting by Geoff Davies supplements the themes of this essay at a more micro level.

By the way in his book, Geoff has an excellent discussion of the toxic delusions which are at the base of our current financial/banking system (Ponzi scheme)--and of the inevitable devastating consequences thereof.

It is so interesting that even Adam Smith, father of the free-market believed lending societies should be overseen by government.

Cheers, BB, WA.

The most drastic estimate of the effect of the recession I've seen so far is that we have gone back about five years. If the banks had been nationalised and stayed that way we would be back about twenty years.

It's called capitalism. Get used to it.

Even to an economic illiterate as myself this makes enormous sense. Did we learn nothing from all the other "market corrections" such as 1987 and 1997?

Ironically the pop-up ad on the article was for CommSec. I laughed till I cried.

RF

Jon J,

In Australia, the nationalisation of Banks has not been under consideration since the 1940s. When Sir Garfield Barwick was in his prime. The High Court has ruled and its not on.

That said, The Commonwealth Bank (also the Central Bank then)played an important role in stabilising the Banking Sector in the Great Depression. Something that is now lost because of Thatcherism. Had the Commonwealth Bank not been privatised, strangely enough,its public ownership could have helped the Free Market, by passing-on the RBA's interest rate reductions. Instead we have the Banks thwarting the Market for their own pofitable ends. At least ours' are not yet Socialist, as in the States.

Incidently, the DOW has halved its value, at least six times since 1906, and only once was there a depression.

The indices 7,000 in the US and 3,000 in Oz, will prove to be very resistant to downward pressure.

Today, we really only have the destruction of Middle Class wealth, where a Superannuant has lost say $500K-$2M on paper. Someone worth $10 million in 1990, before the market took-off, is still worth several times that amount, now.

Going back to Chiirfley's day, one can note, that loyal Bank staff fought hard to protect the Banks from nationalisation. Future generations of Bank staff, now, just as loyal, are so easily pushed aside by the Banks, creating redundancies, for sustained mega-profits.

excellent.