I think it is pretty clear that the Fed, the Bush Administration and others in the wobbly box-seats of US policymaking will do everything they can think of to head off economic and financial catastrophe, as they see it - and the political and strategic catastrophe which they're not admitting yet but which they SHOULD know will go with it.
We always knew (see America's Suicidal Statecraft. The Self-destruction of a Superpower) that they would use the Plunge Protection Team and a variety of "helicopter drops" à la Bernanke, to prop up the economy and the credit markets.
The key question is to what extent any such measures will be effective.
They might create a short-term - a very, very short-term - euphoria; but, by their very nature, they only prop up a "system" which has failed and which, with ever increasing dismay, they are coming openly to acknowledge to have failed.
One crucial point is that, just as the Fed and the rest, before last summer, showed complete unawareness of the financial monster that was being constructed or even of the real threat of the sub-prime crisis, so now they show no understanding of the depth and fundamental nature of the economic and financial crisis with which they - and we - are confronted.
It is not a crisis which just turned up yesterday because something marginal went wrong in, for example, some real-estate or energy market or some hedge-fund bust.
The steady, relentless creation of the monster that we now confront goes back decades. It has soured, poisoned and corrupted the whole system - the real economy, the real credit markets - and it is global as well as national.
The creation of elements which have given particular character to the monster in recent years - and even months - has become increasingly more frenetic. Credit derivatives, SIVs, CDOs, hedge funds, private equity, carry trades and the rest gave an especially avalanche quality to the speculative fever that had already, for decades, been in process of creating a casino economy in the United States and other countries.
We should always be aware of course that there was a divide between the countries with a grave speculative addiction and those who, through their superior perception - or perhaps because of their naivety - took a different course.
The United States policies of self-destruction did not build up new, fake, casino economies in Asia and, especially in the last two decades, in China and India. There it built up real economies, investing in real things and producing real goods and services.
These economies will replace - obviously they already have to a large extent and continue to replace - the United States and the other addictive gamblers, in economic and financial terms. Replacement in political and strategic terms is a little way down the track but it is already on the way. Those who don't discern it are as blind as those who did not see the financial monster which I have identified above being created years, indeed decades ago.
The creation of these "real" rapidly-growing economies means that we have to recognise two fairly consistently identifiable groups whose destiny will be different.
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