Major Banks Hording Credit

Proof of the money fund yields tied to the LIBOR.

The average seven-day annualized yield on retail money funds that invest only in U.S. government securities jumped to 4.29% in the one-week period that ended Tuesday, from 4.01% the week before, according to IMoneyNet Inc.

One key global short-term interest rate -- the London interbank offered rate, or LIBOR -- has taken a surprising jump in recent weeks. That indicates that many British and other European banks are reluctant to lend to one another because of concerns about potential further upheaval in credit markets.

Should Congress not adopt the recommendations outlined above, we can expect core inflation rates to rise over the next decade, and at an accelerated rate – so that in ten years from now we can expect cheering in the media when the inflation rate falls below 50%. As inflation deepens and accelerates, inflationary expectations will
intensify, and prices will begin to spurt ahead faster than the money supply. / It will be at that point that a fateful decision will be made – the same that was made by Rudolf Havenstein and the German Reichsbank in the early 1920’s: whether to stop or greatly slow down the inflation, or to yield to public outcries of a “shortage of money” or a “liquidity crunch” (as business called it in the mini-recession of 1966). / In the latter case, the central bank will promise business or the public that it will issue enough money to enable the money supply to “catch up” with prices. When that fateful event occurs, as it did in Germany in the early 1920’s, prices and money could spiral upward to infinity and it could cost $10 billion to buy a loaf of bread. America could experience the veritable holocaust of runaway inflation, a cataclysm which would make the Depression of the 1930’s – let alone an ordinary recession – seem like a tea party.
CNBC world video on Wednesday's interviews and the continuation of uncertainty in the markets.

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