Circularity
The feedback loop we can learn from.
I’m about to finish 1929 by Andrew Ross Sorkin, a book about the biggest financial crash of all time.
One thing stood out as I was reading. In the 1920s, Wall Street banks lent to Germany to help with their recovery from WWI. Germany then used that borrowed money to pay for WWI reparations to UK and France. Britain and France used those reparations to repay their own WWI debts to the US government, which enabled Wall Street to continue lending abroad. This cycle boosted Wall Street profits.
What did these payments support?
They reduced federal deficits.
They kept the US credit markets liquid.
They were reused for further lending.
In this process, they generated enormous profits for Wall Street at the time.
In other words, the money cycled through a closed loop:
U.S. banks → Germany → Britain & France → U.S. Treasury → U.S. financial markets → back to Germany.
This cycle repeated… until the music stopped.
