Most contrarian financial experts credit the Fed, especially the period of Greenspan and Bernanke, with causing the bomb via imprudent lowering of interest rates and over-creation of money, way beyond the needs of the economy. A central bank run directly by the US Treasury, some argue, would eliminate the need to simultaneously create debt when it created money (assuming it would do so commensurately with the needs of the economy).

The Fed and their banks, using fractional reserve banking (keeping only a fraction of their assets in reserved and compounding their assets with each loan (to anyone)), make monstrous income (why do you think they all work in such huge and expensive buildings). Moreover, they make a lot more trading currencies (which you can do if you choose and if you learn how).

Ramp up in regulation will never solve anything because (a) regulators are always fighting the last war (SOX anyone?) (b) it creates an impression that something is safe just because it is being regulated (how about Fannie/Freddie, the most regulated entities around) (c) regulation gives advantage to entrenched organizations at the expense of more competition (stop giving preference to Moody and S&P, and the paid-by-those-being-rated model will die as new entrants will enter the market).

There is very little help we need from our government (a) establish comprehensive disclosure for complex and/or consequential transactions so that a prudent lay person can make a reasonable decision (b) put insiders who lie in jail (don’t bother with fines). That’s all (OK, you can put CDS and swaps on the exchange).

Let’s get rid of geniuses at the Fed and stop printing money. Then we will have no pervasive inflation (just like in the first couple hundreds years of US history), 90% of the population will have no business being in the market, the mutual fund charade will go away, we won’t have to wonder whether or not we have enough money for the retirement, and our life in general will be simpler and more enjoyable.

More choices and clear consequences, not more obscure regulation. Humans are pretty good at following incentives. They will figure out the rest.

WallStats.com is also new to me, thanks a bunch Barry, go get ‘em!

Read the Book ‘The Creature from Jekyll Island” by G Edward Griffin.

Your chart condenses a lot of information into a very readable format. I particularly like the selection of the seven threads to communicate their interrelationships.

My problem is that your root cause analysis begins in 2000. The root causes began much earlier. They date back to Fannie Mae and Freddie Mac becoming ‘government sponsored enterprises” and Carter’s Community Reinvestment Act. The risk of elongating the chart is data overload, but shortening the timeline gives the impression that this is just more “Bush Derangement Syndrome” rewriting a history that begins when President Bush takes office, ignoring everything that happened prior.