A year or so ago a buddy and me were drinking in a bar when coughing and hacking in walked this guy with disease stamped in red raised letters across his forehead." Nothing personal, but were gettin outta here". Not so fast my pal says we're far enough away we won't get sick. "Are you nuts"? "The CDC is about to classify this guy a walking hot zone and were far enough away"? "Not even a runny nose". Well I listened to my pal, one he's smarter than me, two he's a doctor and three he was buying, so we both got sick and we were both wrong. How? Well we were far enough away, but something I said or did mus ta really set that dripping lizard off because it turns out he slipped the bar tender a c-note to not wash his glass and pour our next round into it. Nice scam, the guy gets away, the bar tender gets fired and me and my pal get his disease, exported out of the hot zone to the other end of the bar. OK I was wrong, we were (probably) far enough away not to catch anything naturally, my good buddy the expert was wrong, we both got sick because someone was willing do anything to infect to us, but now you understand how the mortgage mess got itself stealthy exported around the globe. That's the good news. The bad news is that it's BAD. It's bad, getting worse and no one knows or is saying how bad it will get. Me I'm saying Great Depression, but I've been saying that a long time. Why do you think this site has implode in its name? What bothers me is that some really smart people with data are beginning to say it too.
For one thing despite the global central banks frantically injecting bigger and bigger fixes of liquidity into the main veins of the banking system there's hardly a rustle of effect. Things must be bad. If it's as bad as I think banks won't just close the system will simply cease to function at all. That will cure your inflation. See this from the Wall Street Journal.
"It'll do little to provide a solution to the underlying problems that have led to the liquidity squeeze in the first place. In other words, the increase in mortgage defaults,..."
http://online.wsj.com/article/SB119758694278028095.html?mod=googlenews_wsj
That's the subprime virus poured into CDO and served up in a SIV. Bartenders please wash all your glasses!
On the flip side the FED is feeding red meat to the beast Inflation already eating the US economy alive.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/13/ccbanks213.xml
What's that they say starve a fever feed a cold, Black plaque in this case.
They really don't think this will work do they? I know I don't.
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