We are very insulated here in Australia from the GFC, it really has only just started to bight here.
Its not the same story elsewhere. Most of the world felt it from day one big time, houses for sale in Vages for $1,000,000 pre GFC, were selling for $100,000 post GFC.
The GFC was caused by debt being issued to the un-debt-worthy masses, and being held by the institutions that did not issue it - duped by the lenders.
The Companies and people that lent the money - bad debt - advised the government the way to solve the problem was to print more money - create even more debt - and for the country to use that debt to buy toxic assets, houses / assets now worth a lot less less than the money lent to buy them - buy treasuries, an instrument to print more debt with debt in a circle - sovereign debt cycle.
The sovereign debt was used to bail out the companies "investment banks" that caused the problem.
The rest of the printed money has gone into the stock market via those investment banks and through company share buybacks to make it look like DOW / S&P companies met forecast.
The people who should not have been lent money lost the house the deposit, the job.
They are the people that purchase real things the real economy, that will kick start the economy.
The world is debt saturated in a pyramid scheme of debt.
In an economy that is not growing or barely growing even though the books are cooked, the debt is not doing the holders any good.
Japan has been doing the QE thing since, 1995, it does not work.
To big to fail = even bigger fail down the track that wont be recoverable.
The companies in the stock market depend on customers, but the potential customers got burned or are debt saturated or have lost their job or all, this is the reality overseas.
The old school way of seeing debt as a thing to get rid of ASAP, and letting white elephants go extinct worked, it let to recovery.
The money that has been printed could just as easily rescued those that do the purchasing, but instead they have been saddled with involuntary debt and had pension funds raided, retirement income reduced.
The people who trade and buy real things are the economy, IMO.
Regards Mark H
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