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$700 billion rescue plan

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"may hopefully have saved the viable core of modern capitalism"

An almighty crash has been averted, very narrowly.
By taking the colossal wreckage of the credit bubble onto its own books in a $700bn taxpayer sink, Washington has forestalled a run on the world banking system, and may hopefully have saved the viable core of modern capitalism.
Europe has embedded paralysis in its treaty law. Maastricht prohibits a Keynesian blitz. Budget deficits above 3pc of GDP are not allowed until an EU country is already in dire straits, and even then approval requires a committee vote by 27 states. So Ireland, Italy and France must now tighten fiscal policy into the downturn.
Ambrose Evans-Pritchard, Daily Telegraph 21/9 2008

As of today, the core risk is no longer in the US. It has rotated to the weaker and more brittle polities of Europe, Latin America, and Asia - especially China.

The US government debt (owed to the public, using the IMF measure) is just 48pc of GDP, one of the lowest of the G7 industrial powers. This compares with 57pc for Germany, 94pc for Japan, and 100pc for Italy. After the Second World War, the US debt touched 120pc of GDP.

As the Habsburgs liked to say, today's drama is desperate but not serious.

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Mostly Spain
Banks becoming addicted to the liquidity window in Frankfurt
Ambrose Evans-Pritchard, Daily Telegraph, 21/8 2008