I’m No Economist…

…and I don’t even play one on teevee.

But.

Northern Rock may have been essentially nationalised and made safe for now and Alistair Darling and Gordon Brown may think they’ve dodged a bullet. (Huh. They’d better take a look at the hail of bullets headed their way. Merkel is not going to be happy.)

Ditto the US economy and the Federal Reserve: after lowering interest rates as a spur to lending, for now they’re breathing a sigh of relief.

But it seems obvious to me, the non-economist, that if you have an unsustainable economic bubble, that pumping the bubble up bigger by putting more imaginary money into it to enable even more excessive consumption and dodgy lending might not be a good idea.

Surely it’s just blowing the bubble up bigger, which means that when it does burst, and it will because it has to (something Marx identified long ago but call it a positive feedback loop and economics bloggers discover it like it’s a new thing), then the debris will be spread over a bigger area.

Personally I reckon that this temporary boost of confidence is causing a glut of trading because investors are getting out of the market and there’s money to be made in the interstices of crisis trading, particularly in short-term currency speculation. But what do i know. I’m not an economist.

Global Research, basing its opinion on a WaPo article predicting a global market crash, alleges that because of it a crash is a done deal already.

Among those poised to profit from the crash is the Carlyle Group, the equity fund that includes the Bush family and other high-profile investors with insider government connections. A January 2007 memorandum to company managers from founding partner William E. Conway, Jr., recently appeared which stated that, when the current “liquidity environment”—i.e., cheap credit—ends, “the buying opportunity will be a once in a lifetime chance.”

That’s probably a conspiracy too far. But rapacious as some investment funds are, there are others that must be taking huge hits and as it becomes clear just how many banks and institutions in the US, Europe and worldwide are overexposed to almost worthless junk loan investments, it’ll become clear just how temporary the confidence boost is.

Already the big money appears to be cutting its losses and moving out of mortgages and other financial instruments and into commodities like metals and oil, where prices are rocketing and not dependent on untrustworthy rating companies. Big money wants certainty and solidity in its investments right now and to get it that means liquidity: calling in many of those junk loans and mortgages and converting the resulting cash, such as it is, into valuable commodities.

The word may have gone out to the media from the Fed and the Bank of England that confidence is up and must be maintained at all costs, but the market is saying otherwise as global nvestors rush to put their money somwhere safe.

In that you could argue that they’re doing no more than the customers of Northern Rock did – withdrawing their savings and stashing it under the mattress.