Since the credit crunch began last August, everyone and his dog has weighed in with explanations of where it came from, and opinions about how to make it stop. Some of these cures have even been tried – threatening the banks with nationalisation, massive cash injections, and even (lately) stealing the assets of Icelandic banks. And yet, the markets continue to slide inexorably down, and Western currencies of all flavours seem to be racing each other to the bottom.
What’s going on? How come every intervention is getting it so wrong? Read the rest of this entry »