It's getting worse isn't it?
The recent "co-operation" announced between the Fed/ECB and Bank of England to "provide liquidity" is being done through gritted teeth. To some extent the US has protected itself (and China to some extent) by cheapening the dollar. This has the effect of dumping the worse effects of the crisis on Europe and Japan. But there's trouble ahead - solve the crisis of credit and debt by making more credit and debt available - how long can they do this for?
In The Times yesterday there's some financial wizard talking about the crisis: "There's a leak in the fuel pipe" he says, "so we need to put our foot down harder on the gas".
It reminded me of years ago when I was on holiday in Cornwall. I picked up my mate's inflatable boat in Hayle, put it on top of the car and drove back to Helston. I had a petrol leak in the pipe and drove about 15 miles with my wife and kids in the car. It only needed a spark - static will create a spark as will two stones clashing together and we were history. It was a stupid thing to do but I'm glad to get it off my chest. We had great fun in the boat.
But the analogy stands; the more they increase the supply of credit the more, degree by degree, the situation becomes more potentially combustible.