How good is the human group mind at financial memory? Pretty bad.
For example, consider this really striking bit of history: “The then Federal Reserve Chairman made a phone call to the Bank of Japan Governor on that critical Friday night (Saturday in Japan) in August of that year.” The chairman’s “first words were that the American banking system might not last until Monday. The crisis was that serious.”
Financial history quiz: Which year was that? What was the crisis? Who was the Federal Reserve chairman making such an extreme statement?
Hint: our most recent financial crisis, which started in August 2007 (already seven years ago this month) is not the crisis in question.
The right answers are: 1982. The global sovereign debt crisis, also known as the “LDC (less-developed country) debt crisis.” The Fed chairman was Paul Volcker. How did you do?
Front Porch Punditry
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Mon Aug 18, 2014 9:58 am
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Front Porch Punditry