This is fiddlesticks compared to the tulip bulb one! I’ve never laughed so much in my life as when I read about that for the first time and pictured a load of drunk dutchmen talking up their tulip bulbs!

If whatever you propose doesn’t work – just blame something/body else…

City,

This hinges on whether the governments are able to guarantee the balance sheets when those losses are realised. Whilst I’m sceptical of the possibility that the US will find itself unable to stump up the money it really depends on China, now I am not prone to hysterical or overly pessimistic overtures but I’m witnessing a sudden reversal in earlier optimism from analysts regarding the Chinese willingness or even ability to prop-up the entire world economy. I too recall the ’70s but this is far worse and we are still a very long way from bottom with the IMF running out of funds very quickly.

This is not just the end of a consumption bubble, this is the fallout from the greatest financial fraud in the history of finance.

We still have a nasty real world recession as the period of over-consumption ends.

However, it is wishful thinking on the part of anti-american europeans that the US is going to default. Japan has much higer debts and has not defaulted. Stagnation yes, end of the world catastrophe – doubt it, hope not.

I was not around in ‘74 but the world look like death then and it did in 81′ too – but the darkness passed eventually. Even the great depression was only in full swing for 4 years and we are 2 years into this now.