The global credit system almost grinds to a halt as yields on US Treasury bills reach zero for the first time since the Great Depression, 1934.
Reader's Digest version of the article:
* "Hank Paulson seems to be adding to the risk in the system," and
* "We fear that a virtual nationalisation of the financial system will now be necessary," both from Bernard Connolly, global strategist at Banque AIG.
* Also "China finances the US government. So as long as the Chinese are willing to accept an annual loss of 15pc on their holdings of US bonds in real yuan terms, this can go on, but the decision lies in Beijing. What is clear is that it will take the US decades to pay this off." - Charles Dumas from Lombard Street Research.
* And finally, "What we have seen so far is just a dress rehearsal for the deep recession that is coming. America is going to be losing 500,000 jobs a month. That is when we will see interest rates go to zero. The deficit will be covered with printed money as it was in Japan. The endgame will be helicopters full of cash dropped by Ben Bernanke." - Albert Edwards, global strategist at Société Générale.