Bruce B. Cahan
The financial literacy of America has improved markedly, nearly to college level, as a result of the global recession that started in 2007. What about state-owned banks, is the time ripe to explore that part of economic history?
Americans, now economists, can fill a green chalkboard from left to right, with the familiar logic of our situation:
- our housing bubble, pumped up by loose underwriting and shadow finance, burst,
- this caused Americans’ perceived real estate wealth to evaporate,
- consumers reduced spending,
- lacking demand, companies reduced employment, profitability and investments,
- the economic uncertainty increased the volatility of the stock markets,
- this caused investors to flood into the bond markets, pushing interest rates to low levels, near zero, (aided by Federal Reserve monetary policy interventions),
- all of which now threatens a cycle or syndrome of deflation and recession.