Feudalism, Hyper-capitalism, Socialism or Utopian Star Trekian paradise? Who knows.

In a move that could only possibly make sense for Britain (since it has an independent currency and Britain is the only country in Europe with no economy beyond banking and financial services), the ECB has declared economic war on the rest of the world's wealthy elite, and socialized the future bad investments of the wealthiest European elites by guaranteeing all interbank lending. If the coordinated move stokes inflation fears in Europe, fails to lower the TED spread, or even fails to boost the Euro in the near term, the dollar could go through the roof. Whether this will happen depends on several factors. If European banks start lending to each other, they will recapitalize themselves and each other by making bad insured investments - a backdoor recapitalization. In this case there could be a race between banks and countries within the Eurozone to make as many bad investments as possible. Sound familiar? Yes, because that's how we got here. If it works, inflation internally all around. But inflation of what? Commodities of every stripe have proved themselves too vulnerable to demand-contraction, housing is going to go into oversupply in the very near future - yes, even in Europe. At first, the tech profits look too hypothetical to re-bubble, but...Energy? Yeah probably. Energy: now there is some tech with material, non-hypothetical (and yet metaphorical) teeth behind its profits. And a sector that European xenophobes will love, because it can sustain a certain discourse of 'independence'. Or maybe they will just horde it all, and everyone will start fighting over benefits. We'll see.
If it doesn't work, and credit markets don't "unfreeze", the move is going to look both desperate and indestagflationary. The economy will look so bad in Europe, and everyone will assume that banks are so unstable, that money will flee to the dollar, especially if the economic news in the states continues to be bad, and if Paulson and friends opt not to inflate and socialize their way out of the crisis (the republican illiterati will almost certainly get their way with this).
All this in freak reaction to last week's markets: the worse the news in America, the worse the news in Europe, the better the dollar did against the Euro and the Pound. Gordon Brown and the ECB are trying to break this logic. Very risky considering how complete dollar hegemony is, and how deep the hatred for Europe is in an administration that is determined to have as much affect as possible while it remains in power.