Are You Ready for the Big Bank Run?
China Syndrome 2: A Run on the US Treasury
by Gary Nort
LewRockwell.com
The China Syndrome (1979) was a movie on the threat of a nuclear power plant’s core meltdown. The phrase was said to refer to the core of the plant’s falling all the way to China. The producers were blessed by the March 28 Three Mile Island nuclear power plant emergency, which for a time looked extremely serious. The movie was released on March 16.
There is another China syndrome, also associated with a meltdown. This would be triggered by the central bank of China’s doing nothing.
To understand how this could happen, it is useful to see how a similar scenario took place in 2008.
WHEN BEARS GROW STEARN
The bankruptcy of Bear Stearns in March 2008 was a prelude to a wider meltdown. Wikipedia summarizes what happened.
In March 2008, the Federal Reserve Bank of New York provided an emergency loan to try to avert a sudden collapse of the company. The company could not be saved and was sold to JP Morgan Chase for $10 per share, a price far below its pre-crisis 52-week high of $133.20 per share, but not as low as the $2 per share originally agreed upon by Bear Stearns and JP Morgan Chase. The collapse of the company was a prelude to the risk management meltdown of the Wall Street investment bank industry in September 2008, and the subsequent global financial crisis and recession. In January 2010, JPMorgan ceased using the Bear Stearns name.
The Rest…HERE
