Think hard
McDonalds has a lower risk of default, as expressed in the Credit-Default Swap market, than the United States Federal Government.
Think folks. Think long and hard.
This is what the threat to blow $700 billion has done to America. We now have a higher risk of default on our national debt than a company that sells hamburgers has on their private debt.
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The Fed and Treasury have claimed this is a "liquidity crisis"; it is not. It is an insolvency crisis that The Fed, Treasury and the other regulatory organs of our government have intentionally allowed to occur.
There is massive stress in the credit markets because of this intentional mismanagement.
By telling Americans that their deposits were insured by the federal government, Washington desensitized generations of Americans to risk from bank failures. Now that risk is apparent and menacing to many Americans with deposits above the $100,000 FDIC insurance cap, as reflected by the user traffic on the IRA web site. Not only have we seen the search requests on our site over the past six months shift from large, publicly traded banks to smaller private banks, but the volume of search requests on our demonstration tools has risen five-fold and continues to rise. We interpret the changes in traffic patterns on the IRA web site as growing evidence of a slowly but steadily building retail bank panic. Older Americans particularly are running scared, pulling funds out of still solvent and safe institutions for fear of losing their retirement nest eggs.
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