Banking Crisis?

Banking crises are more common throughout history than people might think. A lot more common.

The only problem is that history shows that they only tend to happen to one generation once, and they become so cautious about banks afterwards that it never happens again in their lifetime. Then the next generation forgets about it all over again and the cycle repeats.

So I guess in that score, we shouldn't be surprised at what is happening with the Northern Rock right now. We were probably due one.

Historically, somewhere behind it all normally lies a tangled web of profligate lending by the problem banks. None so truer than now.

I am sure that the British Treasury and Bank of England will hold true with their promises to back depositors with the Northern Rock. But then when you're playing with other people's money (I guess such a payout will be made simply by running a few extra pounds off the printing press), you can afford to appear generous.

Not sure what this will do to the British Pound exchange rate longer term though.

And looks like another reason to hold gold and silver as per the ISA recommendations of the superb new book Do-it-Yourself ISAs.