We have nothing to fear but fear itself.

So said Franklin D. Roosevelt in his inaugural speech. Perhaps this phrase is as relevant today as ever, because what’s needed more than anything at the moment is confidence in the system; i.e. confidence in the financial institutions to continue to function in the ways we have hitherto taken for granted and confidence in the governments to be willing and able to fulfill their promises to guarantee personal savings.
I have always taken it for granted that my money which is being held in accounts of High Street banks will be safe and available to me on demand. For the 1st time in my life I am beginning to seriously doubt this assumption.
I am all for people in authority being open and honest but I am astounded that such a senior figure as the head of the IMF should be so candid. The worst thing that could happen now is for there to be a worldwide run on the banks. The head of the IMF is presumably aware of this and is also presumably aware that sometimes the smallest thing, such as a misplaced comment could tip the balance between relative stability and all out panic.
My fear is that when I wake up on Monday morning and turn the radio on, the news I will hear is that people in Asia (who will already have been up several hours before I wake up in the U.K.) will be queuing up outside the banks to withdraw their savings.
There is a part of me which is saying I am being unduly pessimistic, but nevertheless, that’s the way I’m thinking at the moment, so I reckon that many others are thinking along similar lines.
It’s a nice, calm, sunny, Sunday afternoon here, so all this talk about wild panic seems like fiction at the moment but I’ve observed the herd instinct before. Here in the UK there have been strikes and protests by the drivers of fuel tanker Lorries in the past. As soon as the general public get wind of this I have seen queues at the petrol stations (even fights breaking out as someone tries to jump the queue) and supermarket shoppers filling their trolleys with bread (based on the fears that the shops will run out of bread due to reduced deliveries – a fear which would almost certainly be unfounded if everybody remained calm and continued to shop the way they normally do but suddenly become real because of the selfish acts of a few). At such times of fear, one sees the worst in people.
So the worst thing to fear is fear itself, confidence is everything and the head of the IMF ought to keep his mouth shut.