Inflation: This time is different
“This crisis started in the nonfinancials and is therefore more damaging to the economy; its severity is likely to lead to a banking crisis far larger than the Lehman failure and possibly greater than anything seen since the 1930s depression. Commercial bankers are now waking up to this possibility. For them, the immediate danger is associated with this quarter end, when demand for credit to pay quarterly charges increases significantly, just passed. Already, businesses are in arrears as never before, with many shopping malls, office blocks, and factories unused and rents unpaid. It is this problem, shared by banks around the world, which due to the severity of current business conditions is likely to tip the banking system over the edge and into an immediate crisis. The extent of the problem is likely to be revealed any time in this month of July.”
USAGOLD note: Macleod paints a picture of runaway stagflation – the 1970s on steroids.
Cartoon courtesy of MichaelPRamirez.com
Repost from 7-20-20