Coming Soon, Banking Crisis of Historic Proportions Knowing our financial history wont give us a perfectly clear picture

into the future but without it, we will be like Columbus WITHOUT the defective compass he took with him. It didn't work very well, and maybe was only a tiny bit more useful than a rabbit's foot, but it got him here. I think the crisis that started in 1873 had a lot to do with the economic turmoil produced by the Civil War and Reconstruction. It was one of the most corrupt and venal periods of American history and, essentially saw the old Genteel Class, who were the class of the Founding Fathers and whose wealth was mostly in the form of land, replaced by a new rich class who have been in power ever since. They are the business class which we now are starting to recognize as an oligarchy. Ironically, it was the same period that saw America draw neck and neck with Britain and then surpass it, in 1900, as the world's largest economy. My guess is that we are in a new period where a new class, produced by universities, which includes, economists, engineers and other people who work with their brains, are in a struggle with the business class for control. Since the time of Reagan, the business class has denigrated this new class of bureaucrats and intellectuals, with a wink and smile from rank and file Americans, but the system that has "evolved" is unstable and showing signs of disintegration.(Read: "Lack of effective regulations.") Before World War I, almost all Americans did their graduate work in Europe. Since the end of World War II, as many Europeans now come to the United States for graduate training. The only people who seem to be able to stop the disintegration are the intellectuals who are only arguing among themselves about the methods but nobody, even the big business leaders, seem to think that there is anything wrong with the very fact that intellectuals and bureaucrats are taking control.

Ordinary Americans have wrongly identified control by intellectuals as "socialism" but in this case, it is closer to that other ugly word, "fascism" because corporations are still owned by stock holders and, more or less, controlled by CEO's. We should read the fascinating history of American economic thought in the 1930's which was divided between liberalism, conservatism, socialism and fascism. A surprising percentage of Americans admired Hitler, Mussolini and Franco during that period. The trend, however, is for power and control to shift from inherited business wealth to bureaucrats trained in elite universities. History always seems to progress from one crisis to another and financial history is no different. We don't go from one class in power to another in power without wars, revolutions and social chaos. British history has been the least bloody. Hopefully we will follow their example and not the recent examples from European history.

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