Polish Blanket Economy

Howard Kunstler's post this morning;

The maneuvers that the big banks are making nowadays, along with their enablers at the Federal Reserve and elsewhere in Washington, really amount to little more than the old Polish blanket joke -- in which (excuse my concision) the proverbial Polack wants to make his blanket longer, so he scissors twelve inches off the top and sews it onto the bottom.

Only in this case, the banks are shearing x-billions of losses off the top of their blankets and re-attching x-billions of new debt onto the bottom. This new debt, of course, goes to cover the old losses and only represents further losses-to-be-reported-later, since the banks are basically insolvent. Borrowing more money when you're broke doesn't make you less insolvent.

Comments

[Jim Hannan]

His name is James Kunstler.

[coco]

Whoopsie. My second cup of coffee knew that.

[chantal]

James Howard Kunstler, actually.

In any case, provocative article. Time to start fine-tuning your armageddon skills: plumbing, beekeeping, and the like.