Who Caused the Financial Disaster of 2008? The Role of Banks and Unlimited Easing

Who caused the financial disaster? The impact of the 2008 subprime crisis and financial tsunami on the financial system was devastating. The main issue was the credit crunch, meaning banks were unable to lend money. The banking industry is known as the 'mother of all evils' because without bank credit, all commercial activities in the Western world come to a halt. In an attempt to solve the credit crunch crisis, the US government immediately injected trillions of dollars into the banking system by issuing treasury bonds and depositing them into the Federal Reserve. The Fed lowered interest rates to nearly zero. This was the first time in history that the US government and the Fed had implemented such a massive and long-term policy of unlimited easing and zero interest rates.

The Fed immediately distributed that trillions of dollars to major banks, all of which are Fed members. The banks were supposed to lend out the money to ease credit, but they failed to do so. Bankers used the money to buy treasury bonds, especially long-term bonds. The Fed was well aware of the US government's financial policy, as the Fed is a 'private banking organization' that implements financial policy. Buying government bonds before interest rates are lowered can be very profitable, so why lend out money to earn interest? As a result, major banks hold large amounts of government bonds. When interest rates drop, US bonds appreciate, and banks make a lot of money. Bankers' bonuses have gone from astronomical to super-astronomical. All of the unlimited easing money has gone into bankers' pockets.

You may wonder what will happen when the Fed raises interest rates in the future, causing bond prices to fall and banks to go bankrupt. Don't worry, when banks fail, stocks become worthless, investors lose their investments, depositors may not be able to withdraw their deposits, but bankers' bonuses are already safely in their pockets, and stocks have long been sold out. When interest rates rise and bond prices fall, banks will be in trouble again, leading to another financial storm, and bankers will make money again. Every financial crisis is an opportunity for bankers to make money.

Even first-year economics students know that printing too much money will cause vicious inflation, and the only way to control inflation is to raise interest rates. Holding a large amount of US bonds during an interest rate hike is suicide. Governments, central banks, major banks, and financial institutions hold a wide variety of bonds, with losses in the trillions of dollars. Bankers are stepping on the accelerator and racing down this path of death. You all know the outcome, no need for further explanation.