Default by the US Government No Longer Unthinkable
Mysteriously pulled post-publication on Sunday by the UK Telegraph but resurrected via Rawles, this article by Liam Halligan is worth the read.
...The trouble is, though, as the bill for these bail—outs keeps rising, so does the possibility that the political consensus will crack and there'll be an almighty, and debilitating, dust—up. Paulson's RTC plan, in theory, could restore confidence. By taking sub—prime loans off banks' books, it could de—ice the inter—bank market, restoring credit lines to households and firms and preventing the "credit crunch" from shifting wholesale, in that fabled phrase, "from Wall Street to Main Street".
But, in the run—up to the US election in November, Democrats in Congress — and even some Republicans — may decide they're simply not having it. How much more can the US taxpayer take? It sounds insane, but the liabilities being taken on by the Fed and the US Treasury are now so enormous that the government itself could default...
Read the whole thing.
Then go get cash out of your bank - enough for three months' expenses, at least.