But how bad is that crisis? Was it wrong to let Lehman fail? Or was Lehman just a symptom not the cause of the chaos in the global economy?

Tough questions, and the World Economic Forum had lined up five top experts (including two Nobel prize winners) to find answers.

http://news.bbc.co.uk/2/hi/business/davos/7859179.stm

What other system can we use then? Some idealistic system that humans can easily corrupt?

‘fiat money’ may very well be the worst monetary system, with the exception of all the others. There’s simply no feasible alternative to the concept. And banks would create ‘fiat money’ even if governments themselves didn’t. It would just be more of an unregulated mess than it already is. The only way to prevent that would be to do away with banking altogether.

@ Daphne

I love Ferguson too – an economic historian who can write for expert and layman alike and does not have too much of an ideological agenda – a rare creature indeed.

I will link, again, the video: http://video.google.com/videoplay?docid=-9050474362583451279 (it’s Paul Grignon’s 47-minute animated presentation of “Money as Debt”). You should also watch “The Money Masters”, which is much longer (Google it). You’ll find out how banks create money out of thin air, collect interest on it and create financial bubbles in the process. The biggest bubble today is the dollar bubble. Very soon, those trillions of dollars guaranteeing defaulting banks will find their way into the large banks’ black holes, causing hyperinflation and the collapse of the dollar. (The euro too is FIAT money, btw).

[Daphne – I don’t put Niall Ferguson in the same category as other commentators on money, which is why I read him and not them. He’s not a financial person but a historian, so his approach is entirely different and more credible – quite aside from the fact that he himself is extremely credible and authoritative.]