Guarantees All Round

In the early 70s, when inflation became a serious problem the solution was to index everything in an attempt to immunize or reduce the negative effects of inflation.

Now the Government is of a mind to guarantee everything.  Unfortunately, for those financial institutions outside the magic circle, solving one problem has created flow on problems as investors react to the economic distortions created by the guarantee.

Which leads to the beginning – which bank (not, surely not, that bank) – suffered a run or was about to suffer a run?  If there was no run and no indications of a run – why act in such a market distorting way?

With economic intervention, like sending emails, sometimes it is better to think again rather than hit the send button.