What's coming for the world economy?

Troubling theories by two economists concerning a possible final financial bubble, followed by a collapse of the world economy. "Protective" regulations and government currency manipulations may be dangerous in the long run:

Through direct subsidies (such as deposit insurance) and indirect support (such as central bank bailouts), we encourage our banking system to ignore large, socially harmful ‘tail risks’ – those risks where there is a small chance of calamitous collapse. As far as banks are concerned, they can walk away and let the state clean it up. Some bankers and policymakers even do well during the collapse that they helped to create.

Each time the system runs into problems, the Federal Reserve quickly lowers interest rates to revive it. These crises appear to be getting worse and worse – and their impact is increasingly global. Not only are interest rates near zero around the world, but many countries are on fiscal trajectories that require major changes to avoid eventual financial collapse.

"The only way to prevent a catastrophe, according to Johnson and Boone, is to cut deficits back and reform the financial system to avoid future hanky-panky. But neither is very optimistic it can be done. The actors benefiting from the short term bubbles are simply too powerful to keep anyone from wresting control of the wheel. And if the reformers ever succeed the money men will simply corrupt them all over again."

Now financial companies can operate on the basis that they are “too big to fail”, in other words too important not to be saved.

Read the whole thing for some interesting information on the connections between Wall Street (especially Goldman Sachs) and the Obama campaign, the potential for serious trouble in Greece and Spain, and implications for the future of "healthcare reform" in the U.S.

What happens when "compassionate" policies backfire?
Well, not to worry. The Country's in the Very Best of Hands.

Even Today.