“This time is different”

hk. In every economic crisis people have been made to believe that there is nothing to worry about and that one should let the financial experts do their job. In this context, the authors of the book presented below have written down their thoughts about the economic and financial crises during several centuries under the headline: “This time is different.” Nowadays this slogan can be heard as well and the parole is even complemented by: “There is no alternative”. People – the sovereign in a democracy – are allowed to do everything except think.
The authors Carmen M. Reinhart and Kenneth S. Rogoff collected all accessible data in 66 countries for a period of 800 years which had led to government and bank crises and subsequently to a sustained and substantial drop of economic performance of a country.
On the basis of profound scientific data analysis they convince the reader of the possibility to foresee crises and to prevent them early enough. They support their hypothesis with examples leading up to the present day. However, as they say, governments and banks facing a crisis constantly repeat: This time is different. This is shown notably in detail by the example of the current (and second) world economic crisis.
In order to prevent crises, they suggest establishing an international authority, which would demand and evaluate all relevant data about credit behaviour of all banks and governments in the world. This authority should stipulate measures that could choke off any foreseeable crisis. However, this authority, as we believe, will undermine the sovereignty of the states in the world quite in the same way as the ESM undermine the sovereignty of the states in Europe. As experience teaches, the banks will not release their classified files, anyway.
The authors’ main advisor is Vincent Reinhart (a relative of Carmen M. Reinhart?). He worked for the FED for about 25 years. The authors argue from an inbuilt point of view, they give a description of the symptoms highly accurately and carefully and propose as a solution the treatment of the symptoms. They do not devote a single word to the real cause of the illness in our economic system: today’s money bears interests that are fixed by the FED in its own interest (The FED was founded in 1913 by the richest families of the USA and affects the central banks worldwide.)
Interests and compound interests augment the fortune of the richest with exponential rate at the cost of the value-adding citizens. In contrast, debts of citizens and of their governments increase exactly in the mirror-imaged way. Without further details on causes of the illness the symptoms are described and evaluated elaborately and in detail. That alone cannot lead to a thorough rectification of the problem.
In addition, we believe that a central authority, which can control governments and banks worldwide, is a dangerous instrument because high finance is strengthened and the participation of the citizens is restricted by such an instrument.