September 14, 2007 (LPAC)--Few things strike more fear in bankers than the specter of a run on the bank, and that fear is now a reality at Britain's Northern Rock, the mortgage bank just bailed out by the Bank of England. News reports and photos from Britain show long lines of frightened depositors at Northern Rock branches, hoping to get their money out before the bank collapses.

Officials and the media poodles are trying to calm the waters, insisting that all is well and advising people not to panic, but all the talk is often counterproductive to a frightened public who understand they are being lied to even if they dont know the details.

Far from being an isolated event at a relatively small bank, the run at Northern Rock represents a new phase in the global, systemic financial blowout. Bank runs, and similar runs on hedge funds and other financial systems, will become increasingly common as the situation deteriorates, and to a bankrupt system, nothing is more deadly than a tidal wave of panicked withdrawals.

When the runs start in earnest, all of the fantasies about controlling the disintegration will go right out the window.