The same thing [as the Great Depression] will happen in 2009, except the roles will be reversed. As Europe falls into a depression, European banks will recall their loans and sell off dollar assets, causing the US banking system to collapse. Once this foreign liquidation and deleveraging of US assets begins, the current need for dollar financing will be replaced by desperate panic to escape America’s collapsing currency. Finally, like with US banks back in the 1930s, European banks will have to recognize enormous losses on their foreign holdings, making many of them insolvent.

Are things about to get really bad (you thought they were already bad, huh)? A long and technical commentary, but worth it for those trying to really unravel what is going on -- and what might happen.

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