Is America’s problem that the Federal Reserve assumes nothing will ever fail?

Water Over Gold asked:


A top economist for the Federal Reserve said they “assumed everyone makes good on the contracts”. They soon learned that wasn’t true…….which makes you wonder what else they’re assuming.

http://news.yahoo.com/s/mcclatchy/20090309/pl_mcclatchy/3184724;_ylt=ApR3Z4EqFe1.aLXG4QDmpTEGw_IE;_ylu=X3oDMTE5MjVkanBvBHBvcwMyBHNlYwN5bi1tb3N0LXZpZXdlZARzbGsDdG9vYmlndG9mYWls

The risks of these below-the-radar insurance policies became abundantly clear last September with the collapse of investment banker Lehman Brothers and global insurer American International Group , both major swap dealers. Their insolvencies threatened to zero out the value of billions of dollars in contracts held by banks and others.

Until then, “we assumed everyone makes good on the contracts,” said Vincent Reinhart , a former top economist for the Federal Reserve Board .

health insurance individual