In my previous blog I noted that author Charles R. Morris is the first writer out of the starting gate to tackle the issue of the "debt meltdown" in a head-on manner.

In this blog I offer you a glimpse of what he has to say about the 1980's and 1990's.

...the truth is that monetarisn (with its premise that money supply was the answer to all things) did not break inflation, Volcker did by using every possible weapon at his disposal including verbal jawboning.

... The demonstration of what America would do to protect its currency changed the world's impression of US economic management.

...President Reagan believed in free markets and minimal regulation. With inflation now beaten back, the economy started to move forward into the new less regulated era. Two of the big stories that emerged from this new atmosphere of minimal regulation were the S&L Crisis and the leveraged buyout rage. But both ended badly...

...When Clinton took office, he immediately embarked on a program with Treasury Secretary Robert Rubin to cut deficits which would by extension he felt would cause interest rates to stay low. This policy ran head-on into the new era of "digital everything" and the markets (most notably the tech, dot com markets) caught fire and raced higher chased by money comfortable knowing that interest rates were staying low.

...But there was a dark side to all this. The market run up had spawned creation of new, complex, structured investment vehicles assembled by quantitatively minded Ivy School graduates.

In my next blog, I will give you a taste of what Mr. Morris has to say about how these complex investment strategies and how they have now placed the world at risk.