And not only are European and Russian banks in trouble, so are Chinese Banks:

http://www.theaustralian.news.com.au/story/0,20867,19067992-36375,00.html

This article, written in 2006, outlined over $1 trillion of bad loans held by Chinese banks. Having lived in China the past four years and hearing through the grapevine that non-performing loans (NPLs) now exceed $1.5 trillion, a mild economic shock could collapse this house of cards in a matter of weeks.

In the China’s case, it wasn’t capitalism that lead them to this quandary. As the article states and my contacts confirm, it was cronyism and corruption — million dollar unsecured loans to CCP cadre — that will lead to the collapse. (Although I can see the few lingering Maoists left in the system will blame the collapse on capitalism and possibly herald a new cultural revolution. Do not be in China when that happens!)

With the economies of Europe, Asia and South America down the tubes, we might get by with a mild to severe recession. On the other hand, it might be a good idea to stock up on food and ammo, just in case…