It is just that simple. Fannie, Freddie, all primary government dealers and all entities with significant counter parties of OTC derivatives cannot fail. One by one they will be rescued one way or another, in the sunlight or in the shade.

Central banks cannot go broke because they have a blank check to reboot their capital if required. What central banks can and will do is destroy the currency of their country.

Gold is not a lubricant (crude), but in the final analysis is a currency. The euro will trade at $2US and gold at $1200 before it moves on to $1650.

All the spin and verbal camouflage cannot stop the implosion of balance sheets.

BUT, in the end, after they are rescued will credit expand? It has to keep expanding. That is the entire problem with debt based currencies. You cannot have credit contract or you deflate. $7 in debt for $1 in income. You need more and more and just the opposite is happening. Imploding balance sheets imply an inability to lend.