From A Banker's Point of View

There are always two sides to a table. If you want to be successful in business, you must understand the point of view of the other person. Unsuccessful people know only one point of view - "their" point of view.

By looking at this crisis from a banker's point of view, you have a more complete understanding of the crisis.

One reason why understanding this crisis is difficult is because in 1971, after President Nixon took the U.S. dollar off the gold standard, money stopped being money and became debt. For most people this is confusing. As long as a person continues to think of money in the old sense, that person will fall victim to this crisis.

How this banking system led the world into the financial crisis we are in today?

After 1971, with the U.S. dollar no longer married to gold, massive sums of money and credit began to destabilize the world economy. (or put into manipulation by the hands of the few?)

It is a conspiracy of the largest banks to rob the world and its people of their wealth.

The crime, or moral hazard as it's often referred to, is that the IMF bails out the banks who recklessly lend money to subprime nations just as the big American banks loaned money to subprime homebuyers in America and our Fed bails them out.

Every time this hot money, or credit, flows into an economy, the money causes a short-term economic boom. When the economy cannot repay the debt, the money leaves the country, leaving the economy bloated with debt, new factories empty, crashing asset prices, and ruined banks.

What does this mean to you and me?

1. Understand the game that is being played by the biggest banks in the world. See the world from their side of the table.It begins with knowing that excessive cash is a problem, which cause banks to find more and more debtors. The moral hazard is that these big banks know that the IMF, the Fed, the government, or the tax-payers will bail them out from their mistakes.

2. To know that the banks want big debtors, but if you want to play this game, you had best be very good at the use of debt. Must be very careful when accepting this hot money.

3. The system had not changed. In 2009, trillions of hot dollars were created. They must go somewhere. Wherever this new hot money goes, there will be another boom and another bust.

By seeing the world from the banker's side of the table, you have a better opportunity to recognize the pattern and not get caught like so many other people, such as real estate flippers, did in the past few years.

Not to get sucked into the real estate boom. Now that the bubble has burst, the smart money is out searching the wreckage for the best deals.