The pound plunged today and was on course for its steepest one-day drop against the dollar for at least a decade and a half, after the nationalisation of Bradford & Bingley (B&B), the stricken UK mortgage bank, fuelled markets' fears over Britain's battered banking sector, and the fallout for its economic prospects.
In the US, the Dow Jones fell nearly 300 points on opening to 10,870 as the market took fright at several bank nationalisations in Europe and the US despite the approval of the "son of Tarp" bailout.
US Treasury debt staged a meteoric rally as investors scrambled for the safe haven of American government securities. The 30-year Treasury bond’s price rose more than three points. The flight to safety was even after the Federal Reserve said it would substantially increase currency swap limits to $620 billion (£342 billion ) with nine leading central banks in response to short-term strains in the money markets.
What is happening is that world investors are seeing that the U.S. is the most stable of all investments worldwide.
This whole thing is not a USA problem, it's a problem with the world Central banks in general.
Several other countries are "Nationalizing" banks also.
Almost this exact same thing happened in 1998.