AUSTRIAN BANKS COULD TRIGGER GLOBAL DEPRESSION--AGAIN

In 1931, Austrian Bank Creditanstalt, owned by Europe's famous  Rothschild banking family,went under,sparking a run on other Austrian financial institutions that soon spread disastrously across the globe.

The ensuing panic decimated bank after bank and is considered the trigger of the Great Depression.

Could history repeat itself, with Austrian banks again triggering a global financial meltdown?

Some financial experts believe that Austria today is indeed again the "cancer" of Europe, the weakest link whose collapse could spur a worsening of today's global financial crisis.

In the 1930's, the turmoil caused by Creditanstalt's collapse was so intense that it lengthened the Great Depression in the United States by at least two years. The name "Creditanstalt" became synonymous among economists for what  we now  call "systemic risk," like the pain that followed the collapse of Lehman Brothers in 2008.

Today, Austria's banks are in trouble again, and experts fear that their woes could spread throughout  the entire world.Just like in the 30's,Austrian banks suffer now from excessive lending in Eastern Europe. Their loans to that region are estimated at $289 billion- 70% of Austria's total economy(GDP).

The outstanding loans are,like the billions in bad home loans drowning U.S. banks,virtually worthless for the moment. The banks' troubles have forced  the government to provide a $130 billion bailout.  Does that sound familiar? 

 Also, the Austrian Chancellor Werner Faymann said banks may have to be nationalized, and speculated that the country could possibly go bankrupt.

This is without a doubt a GLOBAL ECONOMIC CRISIS  and it seems that every government, in a panic, feels that throwing good money on top of bad money is the answer. Time will certainly tell, but as Mark Twain once said," History may not repeat itself, but it sure does rhyme."