I enjoyed your post but would like to provide a somewhat more optimistic view of what lies ahead. The structural adjustments to the financial system require a lot of short term pain, which we are experiencing. However, very few people benefit from a major recession, and since western governments need to get elected, there is little reason for those governments not to create the purchasing power (money) required. The so-called bailouts are a first step to assure there is a delivery system for that money. That is happening very quickly, and the credit systems you and I depend on for most goods and services are quite intact. While business investment may suffer for a period, that slack will be taken up quickly by public sector spending (added to the bailouts) which has been rampant for several years.

When you look at the vaporizing of corporate tax collections for several years, the implications to the US deficit are horrific. Our Windfall gold component will increase substantially. and may become our currency/liquidity for a while. Regardless, the only reason for depression is too little money chasing too many goods and services and Ben will take to flight as directed by his political masters whoever they may be. Good luck to all of us.