[AndyJackson]

there was a $550 billion electronic run on the banks and that was what caused the economic crisis.

HS. First, if we have a system where there can even be a $550B electronic run then we have had a disaster waiting to happen. Second, the underlying problem of high leverage on trillions of malinvestment was another disaster waiting to happen. A large fraction of the economy dependent upon making gazillions off of leverage that should never have been allowed to exist in the first place set us up for a big fall.

[palmer]

It amazes me how people cling to these theories. If it hadn’t been for this or that imaginary villain, the credit bubble would have just continued to grow to infinity.

[Alberta's Child]

It's worth noting that $550 billion may only be a fraction of the funds that have been floating around out there from the U.S. government's off-budget appropriations for the military campaign in Iraq.

It's no coincidence that the Federal Reserve stopped reporting a key component of the U.S. money supply (M3) just a couple of years before the 2008 meltdown took place (I believe it was 2005 or 2006).

I had an inkling that "something ain't quite right here" in 2006-07 when I read a couple of fascinating reports about the enormous real estate boom in the United Arab Emirates . . . largely driven by real estate transactions financed by bundles of U.S. cash that had been paid by the U.S. government to "tribal leaders" in Iraq.