Will the stock market hold...or is the bubble ready to burst?

[Kirkland Laing]

China literally own US mortgage papers. I wouldn't say they're dictating things but they've got a big say in what's going to happen from now on. The global financial system will need a lot of Chinese money over the next few years to get out of its current hole. money from other economic surplus countries and sovereign wealth funds too. So they're like the guy who holds our mortgage papers. Hopefully they won't start setting our interest rates.

Reminds me of US before WWI. After financing the allies during the war, they became the sole superpower overnight, so to speak. Can this happen to China. Are we seeing a major shift in the global balance of power. Is the US on the decline as some have been theorizing.

The US is now in a similar position to Britain at the beginning of last century. It's eminently possible that this crisis could turn into the equivalent of WW1. A lot of banks are going to go bust round the world and there'll be some very big ones to go. Which country is the thing and does the country have the wherewithall to bail the bank out or will it take the country down? Even my Infallibility can't look at banks' balance sheets so we just have to wait and see.

[Kirkland Laing]

Every major bank in every major economy is now bankrupt. Things are going to get very bad indeed. A global Depression is now the best-case scenario. Things will get so bad this year that even Lyle will begin to show concern.