Originally Posted by WWW
FIAT money itself then experiences a run and people only by gold, beans and shotguns.
And this is what, for me, is the real issue behind the American $700b vote. Its not the amount of money involved, but the political confidence in the monetary system. The first vote resulted in $1.1t being wiped off the value of wall street in a single heart beat. They sent out a political vote of no confidence, that potentially strikes at the heart of the monetary system. Wholesale/retail investors are now moving money out of the system, mints cant hammer out gold coins fast enough. The Irish 100% guarantee on deposits is not credible, because they cant cover that amount if the have too. The Irish economy, although relatively small, has started to distorted the markets and caused a mini run on the wholesale investments. So in a way a run has already started on fiat money, small, but nonetheless apparent.
The US politicians have made it clear, self interest comes first. Ireland gives a guarantee it can never honour. The UK will increase its Guarantee next week, to a level that may start to look shaky in the credibility stakes. This weekend looks bleaker than last week end, and that wasn't a pretty sight.