2008 Financial Crisis Pattern
The modern template for engineered-boom-bust-cycles and profits-privatized-losses-socialized. Every element of Jiang’s economic framework is visible in the 2008 crisis.
What Happened
- The boom. Banks issued subprime mortgages to people who couldn’t afford them. These were bundled into securities and sold as safe investments.
- The insider game. Those who understood the system (John Paulson, Goldman Sachs) bet against the securities they were selling. Paulson made $20 billion.
- The bust. Housing prices collapsed. Securities became worthless. Banks faced insolvency.
- Socialized losses. The US government bailed out the banks with $700B+ in TARP funds (taxpayer money). No major banker went to prison.
- Consolidation. Post-crisis, the surviving banks emerged larger and more powerful. JP Morgan acquired distressed assets cheaply.
The Framework Lesson
- engineered-boom-bust-cycles: The crisis wasn’t a market failure - it was a harvest. Insiders knew the timing and positioned accordingly.
- profits-privatized-losses-socialized: Banks kept the profits from the boom. Taxpayers absorbed the losses from the bust.
- platos-cave-analogy: The public blamed “greed” and “market forces” rather than the structural engineering.
- transnational-capital: The BIS and central banks coordinated the response, including the post-2008 pivot to China.
The Post-2008 China Pivot
After the crisis, the BIS deliberately altered the RMB-USD exchange rate to signal the world to trade with China. This wasn’t organic recovery - it was a coordinated decision to shift the global center of gravity to keep the extraction system functioning.
The Next Cycle
Jiang predicts the current cycle’s bust will be triggered by:
- The US-Iran war providing external cover
- Private credit bubble ($2T) and AI bubble popping simultaneously
- transnational-capital extracting value and relocating to Israel
- This time the bust is terminal for the US system, not a reset within it
Related
- engineered-boom-bust-cycles - The framework
- profits-privatized-losses-socialized - The operating principle
- transnational-capital - The engineers
- wall-street-actor - The immediate beneficiaries
- historical-patterns-moc - Other patterns