USA destroying cultural intangibles
USA destroying cultural intangibles

The fault at the heart of the MBS security market is further evidence that the US is in the process of destroying the cultural intangible capital that enabled them to grow wealthy. Gone are accounting standards, the rule of law and the certainty of property title. What next?

Lee Kuan Yew’s comment applies to more than Singapore:

“If you forget that this is a small island which we are built upon and reach a 100 storeys high tower block and may go up to 150 if you are wise. But if you believe that it’s permanent, it will come tumbling down and you will never get a second chance.”

But the rules Singapore put into place will last as long people remember the rioting that resulted in the creation of Singapore. Once they forget why things are the way they are, they will change them. Just as the US and UK changed banking regulations put into place after the Great Depression. Allowing banks to again unleash a credit boom with a resultant bust that they are now trying to stop, by borrowing more! Eventually they will put restrictions on their banks that will last until people have forgotten the Greatest Depression.

That’s assuming the US and UK survive the readjustment in their current state. What was once united can be divided.

UPDATE

See Destroying Cultural Capital for a more profound look at the issue of the destruction of societies cultural intangibles