Tuesday, March 3, 2009

The Debts of the Spenders: Bank Failure Friday(s)

The Great Depression is just getting started. The graph to the left displays the 1930s bank failures vs the bank failures of 2008-2009.

The government does not have enough money to bail out all the bank shareholders. Not when the FDIC is running out of money and printing additional funds would lead to inflation.

Remember, at this point the government NEEDS to keep interest rates low in order to re-finance its flood of stimulus packages. The time will come when the US can stiff China and Japan on its treasury bill. Not now. American debt remains in demand because of its reserve currency status.



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