I feel like Arthur Dent asking why he shouldn't turn on the Infinite Improbability Drive in the face of certain death, especially given that Krugman notes that "the U.S. shadow banking system consists in large part of … European banks" so the collapse of the European banks could bring us down as well.
But seriously, if the ECB won't step up and act as lender of last resort for European nations that face a liquidity crisis, why can't the Fed step in? Isn't this more or less the sort of thing the "Committee to Save the World" did in 1998?
I'm totally ignorant here, so I'm hoping that someone considerably less ignorant on such matters can explain this stuff to me.
Since I'm only hoping for and (alas!) not really expecting a knowledgeable response, this is an open thread.
