One of the many rumours just under the surface during the summer interlude is of an impending bank holiday.
(The phrase "bank holiday" itself being the best piece of marketing since the Department of War changed it's name to the Department of Defense. A bank holiday would be anything but a holiday for anyone with money in banks.)
The bank holiday rumour got a bit more salient with news Friday of 5 more bank failures. The markets dropped 2-3% today. A new season of economic spookiness may be here.
The summer bank holiday rumor got its initial "legs" with a report in June that American embassies were being instructed to hoard local currencies. This credible - sort of - report set off a wave of chatter among the usual suspects: FEMA camp, gun confiscation worriers, Prison Planet types. It's worth noting that the same people spent much of 2008 preparing for a Bush bank holiday.
Frankly, my economic knowledge is a mile wide and an inch deep. My views in this area are a mix of what appears to me to be common sense and a glancing understanding of the basics. And my internal sense of morality comes into play on policy matters.
I see circumstances brewing that may entice the government to force the banks to close for a week or more. The banks are, themselves, still hoarding.
The last gasp of faith in the government has been shattered in the last 6 months. Anxiety that was palpable all spring has now turned to outright anger in the summer. It's under the heading "health care" - but its about everything. If we get collectively spooked this fall like we did last fall, bank runs are feasible. Which makes a bank holiday feasible.
While the population is distracted with health insurance cabal's retrenchment...I mean health care battles... the new depression marches on.Labels: bank failures, bank holiday
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