The worst deflation in hundreds of years occurred during the 1930s when major central banks were on the gold standard and refused to print despite very dire conditions.
Many wonder if the U.S. Federal Reserve will back off on monetary easing when other major central banks of the world are stepping harder on their easy-money accelerators to reinvigorate their economies.
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When people see two major investment banks disappear over the weekend and the largest insurance company in the world taken over, essentially, by the federal government, it gets serious.
The scandal began in 2007 when Barclays (and possibly other major banks) began to lie about their borrowing costs.
Moving forward HSBC and other major banks are likely to be more vigilant when monitoring financial flows between the U.S. and Mexico.
Tapping the TARP isn't as easy as it was three months ago, when Treasury Secretary Henry Paulson basically forced major U.S. banks like Goldman Sachs and Citigroup to accept billions of dollars to flood the financial system with cash--with relatively minimal restrictions.
In March, after a devastating earthquake and tsunami, the Bank of Japan and other major central banks around the world intervened in the markets when the dollar was trading around the 76-yen mark.
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It comes at a time when the integrity of the big banking sector in general is being questioned, most recently because of allegations major banks manipulated a key interest rate in previous years.
It's worth remembering that determined efforts by the Bank of England to bring down the real cost of borrowing did turn the economy around after 1932, when the UK confronted a similar double dip recession - in the wake of another major European crisis, centred around banks.
When the U.S. Treasury and Federal Reserve Board decided to guarantee bank debt and inject capital into our major banks, it started a chain reaction in several sectors of the bond market.
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