Mr. Geerts lists and explains some of those errors under the paragraph heading "The Gradual end of ORTHODOXY," an "orthodoxy" that was built up ONLY after, and in direct response to, a long string of FINANIAL CRISIS in America and the world, culminating in the Great Depression, from the 1920s to the full scale industrialization & employment in America during the WWII "arsenal of democracy" years. But we have a far simpler name for the culmitive "End of Orthodoxy" - we have been calling it "DEREGULATION" which is nothing more, nor less, than LICENSE to LOOT, PILLAGE, rape, and PLUNDER American consumers, American households,
Gold Replaces AAA ratings for Western 'economy leaders" countries
by Geert Noels, chief economist of Econopolis. His book ‘Econoshock’
June 28, 2011 http://www.ritholtz.com/blog/2011/06/gold-replaces-aaa/
The gradual end of orthodoxy
Step by step, the political leaders have been dismantling the discipline, orthodoxy, and safety mechanisms on which, after long periods of crises, the financial system was built . They included (amongst others):
All these fundamentals have been disappearing or have been strongly weakened over the last 40 years. The end of Bretton Woods marked an important change of policy. In the Eighties and Nineties, the banking sector went on a mergers and acquisitions binge. In the US , banks started coast to coast consolidations. As from the early Nineties, as the Maastricht Treaty formed a basis for the single currency, Pan-European banks slowly emerged on the Old Continent. Walls between merchant and retail banks started to disappear. Finally, a shadow banking system boomed over the last ten years on the back of so-called innovation: derivatives, hedge funds, and off-shore financial centers boomed.
- Gold based central banks and currencies
- Controlled leverage of commercial banks
- A strict division between retail and corporate banking activities
- Budgetary discipline
- Money supply control
- Strict financial controls and regulations, no “parallel” or shadow banking system
- Independent central banks
The disappearance of AAA
One of the consequences of this long period of monetary unorthodoxy, is the end of major triple-A (AAA) countries. Japan lost its supreme status long ago, and is slowly fading to a junk status. The US is on the brink of losing its top-notch status, as it is hitting the so-called debt ceiling. The debt to GDP ratio of the US government is around 100%, and this comes on top of substantial private debt levels accumulated in the Greenspan years.