Journey Man Pictures - Overdose: The Next Financial Crisis
Description
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.