Do you remember seeing old pictures of the Great Depression which depicted “lines?” There were two types, bread lines and also lines to the front doors of banks. While we don’t see any bread lines today, trust me, there are bread lines in every single state, and long ones at that.
Nearly 50 million people in the U.S. survive on SNAP, EBT cards
or whatever they are called in your state. Can you imagine the “confidence” it would instill if each day on your way to work you saw massive lines of people waiting for breakfast? Or, when you came home from work you turn on your television only to see long lines again, this time for supper?
I can see it now, some reporter out on the street giving us the “good” unemployment, inflation or GDP news with a line of people in the background waiting for food. My point? False economic news would be harder to “sell” and even harder to “stomach” (pun intended).
Back during the Great Depression there were also the other type of lines, these formed in front of banks. Many banks either “ran out of money” or had poor investments which led to their demise. We also had this type of activity in the U.S. in 2008-09 …but again, we just didn’t see them. There were “electronic runs” of all sorts which we either didn’t hear about or never saw …but they did happen.
This is why so many banks, brokers and mortgage companies were rolled up together and merged. The failures had to be hidden as best they could from the public’s eye because fear would have bred more fear. This cannot be allowed in a system built and standing alone on “confidence”.
I mention the above because another situation is now arising, another “line” is beginning to form. The current line formation is unfortunately the scariest imaginable, we are facing the Mother of all Bank Runs!