More European banks are piling onto the “USA is in serious trouble” bandwagon, similar to the Royal Bank of Scotland warning I posted about earlier this month.
Barclays bank in the UK has stated that “the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall “below zero.” If you’re a consumer of energy or food, you’d agree that prices have hardly been contained this year.
Astute readers will note that there are no predictions of doom coming from any of the US banking concerns. We may not be able to keep the inflation genie in the bottle, but we still are able to control the news enough to keep the sheep from getting spooked. I’m no macroeconomics expert, but when a series of very large, very influential European banks are making moves based on expectations that Wall Street is heading straight for the rocks, I pay attention.
How soon will it become self-evident that we’ve got a major problem on our hands? Before the November elections, or after? I’m sure most pols would prefer ‘after,’ but I don’t know that they’ll be afforded that luxury. The sooner we take a sober look at the overall economic picture and start making mature, rational plans for moving forward, the better. The time for book-keeping tricks and economic sleight-of-hand ruses is coming to an end.