The Troika appears confident of its capacity to contain a financialcrisis, but if markets turn on them, contagion may become uncontainable, as the U.S. financialcrisis proved.
The moves by the U.S. Federal Reserve, the European Central Bank, the Bank of Japan and other central banks of the world serve notice that they are in unison on making sure the European Union debt crisis does not spread into a worldwide financialcontagion.
American investors need to be aware that problems in the Eurozone will lead to global financialcontagion, a worldwide recession and a possible repeat of a crisis like the one that followed the 2008 Lehman bankruptcy.
And we need to understand what went wrong in this crisis, that the very financial instruments that were designed to diversify risk across the banking system instead spread contagion across the globe.