Tue, Mar 10, 11am‒1pm
Teatro Santa Ana
The Great Short
Wed, Mar 11, 11am‒1pm
Teatro Santa Ana
“Quantitative Easing 4ever and the Demise of the US Dollar”
By Dr Betsy Bowman
Thu, Mar 12, 11am‒1pm
By Betsy Bowman
How did things go so wrong back in 2008–2009? And what the heck really happened anyway? It’s still very confusing. Could it happen again? Some say the economy is fine. But student debt, credit card debt, mortgage debt, corporate debt, government debt are all higher than in 2008—much higher. What has been happening over the last twelve years and what is going to happen?
To answer these questions we’ll review what happened in 2008–2009. Inside Job, an Oscar winning documentary by Charles Ferguson, relates step-by-step actions taken, regulations wiped away, and risks disregarded even after the collapse. If you’ve already seen Inside Job, it’s worth seeing again. The docudrama, The Great Short, is a fictionalized version of what happened. Alan Greenspan, then head of the Federal Reserve, said: “We just didn’t see it coming.” Others, characters in The Great Short did see it coming and cashed in. But how could they have done so with the safeguards put into place after the 1929 Depression?
Then President Bill Clinton removed those safeguards with the Glass-Steagall Act of 1998. The new safeguards replacing it, the Gramm Leach Bliley Act or the Financial Services Modernization Act of 1999 is inadequate for the job. Things are more precarious today than before 2008.
Dr Betsy Bowman, in her talk on Thursday March 12, “Quantitative Easing 4ever and the Demise of the US Dollar,” will explain how the quantitative easing (QE) policies of the US Federal Reserve have allowed corporations to buy back their own stock, which was formerly illegal. These QE policies have also allowed the corporations’ executives, boards of directors, and shareholders to enrich themselves while adding to the same corporation’s debt and the US debt. Intervention in the “repo,” or repurchase agreements’ market (another form of QE), has further added to the US debt and has weakened the dollar. The US has long been the country with the largest debt in the world. The size of the US debt today is $20.5 trillion dollars with annual interest payments of $380 billion per year. This debt is casting doubt over the US dollar’s reserve currency status as fewer countries are buying US treasuries as their own reserves. Contrary to what is said, the US is now a poor country, like we used to think of Italy, Greece, and China where almost half of the population lives in or near the poverty level. The debt levels in US society for students, credit cards, businesses, corporations, underfunded pension plans, and the government are unsustainable. The day of reckoning is coming.