Browse > Home / Coming Economic Collapse / Are We In The Middle of A Financial Meltdown

Are We In The Middle of A Financial Meltdown

March 12, 2008

The scariest thing I’ve read recently is a speech given last week by Tim Geithner, the president of the Federal Reserve Bank of New York. Mr. Geithner came as close as a Fed official can to saying that we’re in the midst of a financial meltdown.

To understand the gravity of the situation, you have to know what the Fed did last summer, and again last fall.

As late as August the favorite buzzword of financial officials was “contained”: problems in subprime mortgages, we were assured, wouldn’t spread to other financial markets or to the economy as a whole.

Soon afterward, however, a full-fledged financial panic began. Investors pulled hundreds of billions of dollars out of asset-backed commercial paper, a little-known but important market that has taken over a lot of the work banks used to do. This de facto bank run sent shock waves through the financial system.

The Fed responded by rushing money to banks, and markets partially calmed down, for a little while. But by December the panic was back.

Again, the Fed responded by rushing money to banks, this time via a new arrangement called the Term Auction Facility. Again the markets calmed down, for a while.

Read More

Share This

If this is your first time visiting Bible Prophecy In The News, I'd like to invite you to subscribe to our RSS feed. Thanks for visiting!

Written by admin · Filed Under Coming Economic Collapse 

Comments

Got something to say?





Close
E-mail It