Remember the scene from the Titanic - the lookouts spot the iceberg, alarms are sounded, and furious preparations swing underway above and below decks.
Giving credit where credit is due - the Titanic crew did everything they were supposed to do in that situation. They operated to state of the art "Best Practices" in ship operations, but the unsinkable sank nonetheless.
Eerie similarities exist in today's US economy. Goldman Sach's released a report yesterdaythat estimated losses from the Credit Bubble at 2 Trillion dollars (which is four times the previous worst-case estimate).
But wait, there's more! Collapse of the Dollaragainst other world currencies has all but halted foreign investment into the US. The Chinese are making noise about moving their reserves out of Dollars. And this coupled with allowing the Chinese Yuan to float to its real value (presently undervalued against the dollar from 10-30%), you might have a real iceberg on your hands.
But wait, there's more! On the trade front, exporters to the US are howling in pain, entertainers are asking to be paid in Euros, and those Gas prices at the pump are underpinned by the Dollar being worth less and less. Oh, and while domestically we're repossessing all those homes bought with subprime loans, Home values are dropping nationwide, silently wiping out $billions in assets without so much as a whisper.
The Federal Reserve in the meantime says there's plenty of slack that can be taken out in Interest rate reductions, which will easily compensate for any eventuality. The Fed is operating with tried and true "Best Practices", used for decades now.
All the while, our fair ship races towards a appointment with destiny & an Iceberg