Who Really Caused The 2008 Money Market Meltdown?

melting icicles

Photo: Muffet via Flickr

First of all, I have wrestled with this question of the money market run in September, 2008 for years and I am curious who would have motive for the run on the money markets. I have gone to Mish and others with the scenario trying to pick brains, and gotten little information. Update: Mish has said that if anyone is to blame it is BernankeHere is one thing I am convinced of, the Chinese had no motive to destroy the United States. The United States is too important to China, both as an investment vehicle and as a buyer for goods produced there.

I have a couple of thoughts regarding the meltdown. First, I think it was likely wealthy bankers from the West who raided the money markets. I don’t mean the banks themselves, but investors who move a lot of capital could have done this. And even if Glenn Beck is right, saying it could be China, that would not have been an effort to destroy the United States in my view. I am certain that China was pretty worried about high priced oil and high priced housing in the US, that was going to crash. China expressed a worry that the bonds she was invested in would keep their value, after the crash of the housing bubble.

If we look at the crash of Japan because of Basel 1, we see it was because Basel forced high reserve requirements upon the Japanese banks in an effort to rein in the bubble. So it seems logical that Basel 2, by 2007, would have tried to rectify the problem of easy money and off balance sheet banking that the accord allowed in 1998. It seems to me that to say this was a foreign act is a diversion from the truth. Or at least the conclusion that others were trying to take the US down, when we know our own Federal Reserve looked the other way as Ponzi lending took over, is a diversion I cannot accept. 

It is consistent of Beck to defend the corporations of America. But there is truly little real justified defence of the banks, who used easy money lending to make profits before the house of cards collapsed. If our military is trying to establish a false set of facts or conclusions, we are defenseless as a people and the Ponzi machine will be reestablished with the Bernanke backstop, as soon as the powers that be can figure out how to get from the MERS fiasco to interest only lending again. Almost everything that the powers of finance plans looks like a financial attack upon mainstreet to me.

At some point, the military won’t have to worry about the outside influences impacting our housing bubbles, as Americans will simply reject the easy money predators once and for all.

Link: BIS reported that European Banks suffered a shortage of dollars.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.