The current financial crisis is only the beginning

Yes, Virginia, the banking crisis will one day end, but what comes after promises to be even more arduous.
With the solvency of the Western banking system seriously in question, there is a temptation to hope that if only the latest bold, last-ditch rescue plan will work, we can go back to the good old days of 2006.
One could argue that the banking crisis is just the cold sweat, not the flu that follows it.
The problem is not just that the banking system has been broken by an orgy of foolish lending but moreover that huge swaths of the global economy are predicated on that foolish lending and the consumption it allowed.

Read More