It appears that this week is going to be very significant for the future of the European and world economy. The stakes could scarcely be higher, with daily developments proving to be very interesting but frankly also quite scary.
The whole free market system is creaking – the first credit crunch was averted, as readers will recall, by Central Governments underwriting the debts of banks, and now Governments are trying to borrow from bigger central banks such as the ECB, but ultimately this can only be papering over the cracks. the weak are pulling down the strong aand history seems to be repeating itself with Germany in an axiomatic position overall in terms of control of Europe as the only fundamentally strong economy in Europe.
And so it goes on – a credit crunch now seems almost like a micro problem, as the focus shifted to Governments not banks, but as the drastic intervenetion last week from the US shows, this crisis will affect all of us one way or the other.
No wonder reports last week showed that those who have any spare income are paying down their home mortgages at record levels – the times they are a changing !