The recent run on Northern Rock (UK) highlights what many have...

The recent run on Northern Rock (UK) highlights what many have been saying for weeks. The fact remains that the problem is wide spread and no one knows the true extent of the mess caused by Subprime and Alt – A loans. 125,000 such loans are to be reset during the next few weeks in the UK and some 2,000,000 such loans in the good o’l USA.

Then there is the problem with the value of commercial paper that the banks hold. This commercial paper has turned into toxic acid and it seems that no one wants to touch it. European nations, China and other emerging countries have been sold commercial paper in an effort to ease the growing trade deficit between the US and it’s trading partners. These trading partners also hold vast amounts US currency (primarily due to the trade deficit). God help us if they decide to dump the US dollar.

Central banks have been pumping liquidity at a record rate into the banking system since this problem started. So far, the problem appears to be contained. However, the question remains, how much longer can they continue to stem the tide of increasing losses and the forsaken bank runs.
Is Northern Rock an exception or the first of many? I subscribe to the latter.

So, how safe is your money?
• The best way to find out is to call up your bank and ask them. What you need is a plain Vanilla account without exposure to subprime etc.
• There is also a flight to Gold and Sandybeaches has posted an article titled ‘trading in gold on the stock exchange’. Thanks, Sandy!
• Gold stocks, it seems may extenuate any upward or downward move in the price of Gold. However, may also be subject to volatility in stock markets. Thanks, Sparkler and Dwayne for your posts.

Folks, this is not a hypothetical issue. It is happening right now!


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PLEEEEEEEASE folks, don’t worry. EVERRYTHYNG will be ALLLLLLLLLLLLL RIGHT. Pay your taxes, drink your Beer and don’t worry. The Government led by the leader of the free world (Dublya) will take care of EVERRYTHYNG, Ya Hear?

Y’ALL BE GOOD NOW!!