Monthly Review - April 2022
Between them Georg Hegel and Karl Marx concluded that history repeats, the first time as tragedy, the second time as farce. If central bankers bothered themselves with the study of economic history, they too would have discerned that their policies were also likely to repeat as Hegel and Marx observed, the first time as tragedy, the second time as farce.
The seeds to the GFC in 2008 were so depressingly predictable. In very simple terms, if you cut the cost of borrowing sharply whilst at the same time loosening financial regulation then, unless you are a central banker living in a purely academic world, it should come as no surprise if “animal spirits” prevail and excesses build within financial markets. Unsurprisingly that is exactly what happened between 2001 and 2005. Leverage was allowed to build to such a level that when sub-prime mortgages wrapped in structured finance vehicles inevitably started to default the threat to the financial system became existential.
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LeifBridge is a trading name of Shard Capital Partners LLP. Shard Capital Partners LLP is a limited liability partnership, registered in England with registration number OC360394. Shard Capital Partners LLP Registered office:36-38 Cornhill, London, EC3V 3NG.. Shard Capital Partners LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom, reference number 538762.
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