Be afraid, be very afraid - this baby's gonna blow.

In Hollywood catastrophe movies, it's often only the heroes that are privy to the news that the earth is about to explode or that a new ice age is starting tomorrow.

The banking crisis is headline news and whilst the earth isn't going to explode, economic conditions are rapidly worsening. Banks are refusing to lend to each other, even overnight, at the moment and central banks are becoming pivotal players in the markets, almost acting as central counterparty in an effort to dampen the havoc.

Do most people understand the gravity of the situation - I doubt it and for understandable reasons. After all, to most people the banking system somehow just works and provided you can get a mortgage and use your ATM card, what else is there to know? Sadly, the fear in the banking community is going to hit everyone. Here's some examples of how
Alan Greenspan, who was the revered Chairman of the US Federal Reserve Bank until his recent retirement has today described the current crisis as the worst since the WWII and considerably worse than the Japanese Banking crisis of the 1990s given its' global reach.

The shock-waves from this crisis will reverberate widely and not be contained within the banking sector. Be warned.

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posted by John Wilson @ 12:07 PM Permanent Link newsvine reddit



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