Almost exactly 10 years ago, amid the rapidly worsening «subprime mortgage crisis», Lehman Brothers Holdings Inc., was forced to file for bankruptcy. Shortly thereafter, actually within hours AIG collapsed, triggered a run on most money-market funds, which accelerated a cash crunch and ultimately not only wrecked the economy by abolishing millions of jobs. It also caused catastrophic material, social and moral damage. Ever since, countless biased statements and false explanations dominate the political debates.
Steve H. Hanke (Johns Hopkins University, Cato Institute and recently appointed as ‘G. v. Haberler Professor, ECAEF’) ranks among the world’s leading and most influential monetary economists.
Backed by persuasive arguments, plain facts and a host of charts he not only proved that in sharp contrast to the official narrative, the US monetary policy since 2002 acted pro-cyclical. These policies triggered the notorious bubbles, let them pop up and lead to the «Great Recession» of 2008/2009. Among other examples, Hanke also exposed H. Paulson’s role and clearly showed that in spite of his given authority to rescue Lehman Brothers and contrary to the distorted public account, Ben Bernanke (then chair of the FED) in a politically motivated panic reaction failed to act appropriately, and thus unleashed the most terrifying moment for the US economy since the Great Depression of the 1930s.
According to Prof. Hanke, we should be more careful of what we read, take for granted and use for investment planning, as 95% of all published financial and monetary reports on policy matters are either «false or irrelevant».
This lecture was initiated and sponsored by the «Liechtenstein Academy Foundation».