Part 11/14:
The lesson? No matter how minor the crisis appears, if the core issues—risky assets, inadequate regulation, moral hazard—are unaddressed, more severe failures are inevitable.
The Imminent Systemic Crisis: The Endgame
The core problem remains: Incentives for risk-taking are distorted. Since the government and central banks have shown willingness to intervene endlessly, banks and financial entities continue risky behaviors, knowing losses will be socialized. The cycle of risky loans, hiding losses, and expecting bailouts is self-perpetuating.
Eventually, however, the accumulation of unrealized losses and fraud will overwhelm these safety nets, leading to a full-blown financial crisis, similar to 2008 but potentially even worse.