4 responses to “Contagion.

  • Gunny G

    JESUS!

    WELL DONE!

    Steve, you should be teaching economies brother. The Euro is toast and I knew it way back when because historically speaking, Europe could never unite as one. If they could, our ancestors would never have left!

    I passed this on to a few others.

  • Tim Handley

    Have to agree with Gunny about your penchant for professing economics. Like Dr. Seuss and Lebowski’s carpet, your pictures really tie it all together…

  • everythinghk

    The real issue here is that interest rates are so low that the banks could not sustain any type of a run because their cashflow is so low.

    The global banking and global economy is nearing the point of no return (I think it’s already well past that).

    Not sure if this crisis could be staved off but I think out Fed should start bumping interest rates up at 1/16″ to 1/8″ point every 3-6 months.

    Doing this might signify the end to Mortgage roulette and get the final wave of home buyers off the fence to own homes. Thus helping the ever ignored housing crisis.

    Bumps in interest rates would boost consumer confidence in that saving account would not be running on negative interest rates.

    The fractional reserve system should be dialed back a bit to maybe 8 to 1 as opposed to 10-1. This has to be done super gradually as it causes a contraction in the money supply.

    Same applies to credit card companies. Dialing the outstanding debt in a little more might help. But again has to be done slowly as the money supply will contract.

    It’s a huge dilemma and smart people are moving money into hard assets.

    At this point I find myself struggling that if the banking system collapses that even gold and silver would be a safe havens. After all inthe grand scheme of things what value does gold and silver really have in an economic collapse.

    HK

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