Greece Outside In: Banks fiddled while Rome burned: how to predict the next global financial crisis

Sunday, April 13, 2014

Banks fiddled while Rome burned: how to predict the next global financial crisis

Amid signs of another asset bubble, and as memories of the last crisis fade, we might be seeing the beginnings of the next crash

Looking back, it was easy to see that the crash was coming. There had been too much cheap money. Debt had exploded. Speculation was rife. The gap between rich and poor had widened. Welfare spending had risen. The financial system was so stretched that even a modest tightening of policy was enough to make it impossible for over-borrowed debtors to service their debts.

The US in 2007? No, this was imperial Rome during the reign of Tiberius in AD33. It was not the first documented financial crisis; that dubious accolade goes to the states of the Delian League in ancient Greece, which defaulted on their debts following a naval blockade by Sparta.