The international environment preceding the crisis was characterized by globally stable economic growth, the growth of productivity and a low level of inflation - which was a primary result of policy changes by central banks focused on inflation targeting. Short term interest rates were at historically low levels both in the US and worldwide. Due to the recession in 2001, the US Federal Reserve Board (Fed) introduced a sharp decrease in its target interest rate. Even though this resulted in the recovery of the economy, figures remained weak, not showing signs did not of a substantial GDP growth or growth of employment, at least until 2005. In addition to this "jobless recovery" there were threats of a decrease in inflation, which was already at very low levels and a serious concern that the US might experience a recession decade.
Ferguson titled the first part of the documentary "How We Got Here", wherein he shifts the documentary from Iceland to the United States of America and then explained that the United States’ financial industry had been properly regulated during 1940 to 1980 which was later followed by a prolonged period of deregulation. Ferguson stated that the to explain the roots of the Global Financial Crisis to the early 1980′s when during the Reagan government regime a deregulating bill was being passed for the banking and finance industry, but it was greatly watered down bill was enacted wherein a number of government acts and regulations that came into force after the Great Depression of the early 1930′s.?s. Ferguson regretted that despite the downfall of savings and loan associations in late 1980s, the loud and clear warning that something wasn't right in the finance industry was left unheard and unaddressed, which resulted in continuation of the massive deregulation spree, which went on well into the next decade. In order to convert mortgage and other types of loans into more money-spinning financial instruments, the financial wizards and mathematicians devised many creative ways which were backed