Some of the giant European banks are now hoarding their cash because they are scared of a possible European financial meltdown. But their hoarding cash will help to bring on the meltdown they fear because it will freeze the credit markets.
Frozen credit markets don't buy sovereign debt, which means these nations' won't have they money to pay their bills and they don't make corporate loans to companies that would otherwise employ more people if they had the resources and who from profits would pay taxes, taxes which are desperately needed.
This is the time for bankers to step up and show leadership, courage and confidence. Or they will bear the consequences in huge write offs of defaulting nations' debt, far beyond what they would otherwise have to write off.
As President Franklin Delano Roosevelt said during The Great Depression, "We have nothing to fear but fear itself." Today's colossal financial mess can be solved if we are determined to do it and if we don't let our fears overcome us.
Dick
To learn more, please see "European Banks Stash Their Cash," The Wall Street Journal http://online.wsj.com/article/SB10001424052702304020104577386462981039998.html?mod=googlenews_wsj For non-subscribers, if The Wall Street Journal truncates this article, please Google the title so you can read it.
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