Saturday, November 15, 2008, 1:34 PM
After we talked a little about the economy on my birthday, I thought it would be helpful for me to write down my understanding of what has been going on for you. I also wanted to do this for myself to help organize my own thoughts. I was hoping to just do a quick write-up, but it turned into a 20-page essay that gets into a lot more detail. I tried to keep it non-technical without dumbing it down. I was also hoping to get into some predictions and investment advice, but I think 20 pages is long enough. I’d be happy to share my advice with you after you read this essay. Feel free to pass it on if you think anyone else would like to read it.
See you tomorrow!
Explaining the Economy to Dad
November 15, 2008 (Dow 8,497)
In order to understand what is happening in the economy right now, it is important to have an understanding of economic principles and history. Far from being a “natural,” emotional market cycle, this crisis is the direct and inevitable result of a fraudulent monetary system forced upon the world by their governments and banks. This broad manipulation of economic activity has been further aggravated by more specific governmental interventions in many markets, most notably the housing market. This essay is divided into four sections: Economic Principles, History, The Housing Bubble, and End Game. The first two sections explain the general causes of the current downturn, and the second two sections chronicle the specific events that have resulted from those causes to lead to the present situation.