This I thought warranted its own diary - it explains why the current crisis is far worse than most people realize & why the banks are teetering on the edge of an economic abyss:
Something very strange is happening in the financial markets. And I can show you what it is and what it means...
If September didn't give you enough to worry about, consider what will happen to real estate prices as unemployment grows steadily over the next several months. As bad as things are now, they'll get much worse.
They'll get worse for the obvious reason: because more people will default on their mortgages. But they'll also remain depressed for far longer than anyone expects, for a reason most people will never understand.
kitco
Also, don't forget all the money the FED is pumping into the system is created out of thin air, and must be "paid back" eventually, or at least the interest.
That includes the so-called Bailout, which is loaned to the U.S. gov. from the FED, which of course collects interest.
Add into the equation the lowering of the interest rate, and it is clear the PTB or the FED in this case, is perpetuating the problem on purpose, through inflation.
AIG is only a subordinate of the FED, and was only capable of causing this disaster through the FED's backing.