The government is banking on the American consumer to rescue the economy. But debt-ridden households have had enough, says Andrew Gordon. He says the government’s massive bailout are benefiting very few in the short-term. But the long-term consequences will be felt by all.

Iceland today (Thursday) secured nearly $11 billion in loans from the International Monetary Fund (IMF) and other nations. The bailout will help the island nation stabilize its currency and recapitalize its banks, but it will also saddle its tiny population with a huge debt burden.

Congratulations on a long well fought race. Now, “fasten your seat belts, it’s going to be a bumpy ride.” The classic line from Betty Davis seems appropriate. No matter who won this race, they were inheriting a hell of a mess. No need to go into detail, just the list is daunting enough.

– The worlds financial markets are waking up to a harsh reality this morning: the financial crisis has moved far beyond US subprime-mortgage meltdown to a fundamental breakdown of trust in the money markets that is dragging the sick and the healthy down alike. Yesterday’s drop below the 10,000 mark for the Dow is ample evidence that the Bush administration’s pork-laden plan to rescue the US banks has fallen short of its stated goal of shoring up confidence in the markets.

– As quoted in Agora Financial’s 5 Min. Forecast, “The idea of the bailout,” one trader told CNBC soon after the close on Friday “sounded better than the actual bailout.” 

These are worrying times. Not only for investors, but also for anyone with their savings in US banks. Already, some of the biggest names in banking have gone belly up. How do you know whether you bank is safe or not? Keith Fitz-Gerald in Money Morning says there are three steps you can take to make sure your bank is safe.

The FDIC is beefing up its staff in anticipation of more bank failures, reports The Dallas Morning News today. This doesn’t bode well for the insurer, says in David Newman in The Sovereign Society. The problem is the FDIC is running our of cash to fulfill its obligation to insure deposits…

A banker, they say, is someone who wants to give you an umbrella when the sun is shining… and then takes it back when it rains.

German Business Confidence…came out softer than expected in April, falling from 104.8 in March to 102.4. That was quite a tumble in business confidence, and apparently wipes out the previous three months of stronger confidence.

The International Monetary Fund is trying to figure out what to do with the world’s currency problems. Adrian Ash tells us about the goings on with global money policies and which way we can expect things to go. Either way might not be that bad.

You don’t have to be a rabid libertarian or Marxist historian with leather patches on his jacket to look at the current world banking crisis and ask “Cui bono…?“