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The Global Financial System Is A Rube Goldberg Machine

The Global Financial System Is A Rube Goldberg Machine

Much Of The Economy Is Like This Machine

More than one economist, big wig CEO, and Fed watcher has alleged the problems haunting the financial system have very deep roots. These people often contend governments and central banks have not fully rectified the problems causing the great financial crisis of 2008. Instead, they have merely papered over our failures by printing money and flooding the system with liquidity.

Let’s just cut to the chase. Overall, the global financial system is not a well-designed efficient machine. Instead, it is a cobbled-together mess all glued together in a haphazard way to get the job done. To make matters worse, this system is greased by the greed of those who benefit from stealing a little from here and there. In the real world, things are usually not intentionally designed to be complicated but the reality is that they just are.

This means that more often than we would like to admit, systems thrown together with various parts or pieced together haphazardly are prone to be unreliable. When we try to explain events in terms of cause and effect the bigger picture has a way of getting lost. Often hidden away is the risk that results when complex poorly built systems become codependent upon other poorly built systems. Bestselling author Nassim Taleb who wrote, “The Black Swan” detailed in his book how when something is highly complicated highly improbable and unpredictable events can and do occur.

While pondering the conundrum that has become our current economy, I stumbled upon an analogy. Simply put, the global economy is like a Rube Goldberg machine. These are “goal-oriented” contraptions built in a ridiculously complicated way to perform what would normally be a simple task…

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