Tuesday, May 15, 2012

Bankers are Running Scared!

Because so many banks are on the verge of insolvency or have already reached that state. So they are not lending. They are still way over-leveraged and trying to work off all the bad loans they still have on their books.

Because it is difficult for companies to finance their operations, economic activity, pretty much everywhere throughout the EU, continues to contract. This in turn is causing more bad loans at the banks and yet more contraction of bank loans to businesses.

This downward spiral has all the outer appearances of being a deflationary collapse, except that inflation in the EU is rising, not falling. This presents an interesting conundrum...

- Read the full interview at King World News here: