Aug 4, 2007
Credit/Check Clearing System Beginning to Lock Up- No Money for Nobody
The global financial system is clearly in big trouble. Everyday last week at least one hedge fund or mortgage company blew up.
Many funds are no longer allowing redemptions. Rumor has it that several of the clearing houses for stocks, commodities, and banking transactions are beginning to lock up due to the velocity of monetary transactions.
It could be said that we are reaching a financial singularity.
In the worst case this would mean that if you depend on ANY type of check for payment, it may not be negotiable for days, weeks, or months.
This includes paychecks, social security, pensions, welfare, etc. This means that only currency will be acceptable as tender.
There is only about 300B of currency in circulation which amounts to about $1000 per person in the US. The FED has been silent, but behind the scenes I suspect mass panic.
Perhaps that is why Bernanke said upon his appointment, that if we ever had a financial crisis, he would not hesitate to send fleets of helicopters out to drop dollars from the air.
Mastercard has taken a big hit and there are reports that high risk holders accounts are being frozen, so they do not max out there cards in a panic.
Thousand of people are being evicted from their homes which could turn into millions if paychecks can no longer be cashed.
Time to duck and cover friends