MkI havent read his book. But he has been quite expansive in the...

Mk
I havent read his book. But he has been quite expansive in the media about how he "saved the world" by preventing a global meltdown after LTCM which he said if it had been allowed to follow its natural course would have resulted in something akin to what we are experiencing today. Rudd seems to think he is in the same position .
The fallout in the hedge fund community was fleetingly quite large following that potential debacle.
Then of course he went back to reading in the bath.

I canot believe a person with so called intelligence could look at the massive growth in derivatives and hedge funds- quite evident by the time buffet published his report... i think in about 03, and come up with the conclusion that there was no action to be taken.
My take on it is that he probably saw it as the only way forward anyway. His anti deflationary rhetoric following 9/11 was starting from the basis that the Us were the only ones in aposition to save the world from deflation. At that time we had

1 Eurozone (as ever)in moribund growth
2. Japan still recovering
3. Asia still reeling from the 97 crisis
4, China still a babe

Who was going to drive world growth? Surely it was the US's duty to pick up the slack no matter how and pull the world out of the post 97 asian crisis/russian debt crisis/LTCM crisis/Post y2k tech bubble crisis/post 9/11 crisis which was heading for a deflationary spiral.

His hope I believe was that someone other than the US would eventually step up and be the next driver of world growth. Someone did- China.
But instead of the growth being healthy, we ended up with the mercantile, bastard version of world trade where china lent to the US and provided sleeping bath man with his great " C O N U N D R U M" as to why US bonds yields kept falling. With this great puzzle bamboozling even the greatest minds that Harvard could produce we went on our merry way with massive world consumption financed by surging housing spurred by the great mans conundrum. Great myths were created and the usual "this time its different" eg supercycle "stronger for longer" bulshit to explain the obvious.. too much money chasing too few comodities.
How anyone could convince themselves that it was Ok to be giving loans to low income poor risk buyers where they were assessed on starter loan serviceability when they had massive increases built into the repayment schedule is beyond me. Another Myth.

What is the most worrying thing going forward is the complete lack of new ideas. Greenspan bred Bernanke. Geitner is more of the same (where is the change Obama?)
All out of the same philosophical school of thought , all preaching to harvard business graduates . All clueless in this environment.
No one willing to make the hard decisions. Perhaps China and Russia will show the way with some interesting ideas that came out of Davos.