>> Are you kidding me? If most of the major world banks went BK you would see 50%++ unemployment within 3 months... there would be shortages of everything from food to fuel. Essential services would stop. No import, no export.
You're assuming that if banks "went bankrupt" they would stop functioning altogether, which they, of course, wouldn't. Transfers of money would still happen just as before, paying and receiving, just as before. And even some lending would still occur -- it might just be more conservative.
>> Where, pray tell, do you think money or credit would come from?
Credit markets are important, but in the short term -- e.g., commercial paper, there are other resources than banks.
But I think you are, as you're prone to do, overstating the situation. It is not automatic that some bank failures would have brought us to the economic disaster you've suggested. When you say "No import, no export" -- that's a bit of an exaggeration. There are still motivated sellers and buyers, and the fact that credit markets are disrupted does not imply they can't find ways to make business happen. |
