They have arrived in Anatolia. Now, they've crossed the Black Sea to Rumania! And now they've attacked Greece!

Europe is watching the movement of Avian Flu bugs as if they were a Mongol army. The whole continent is on the verge of hysteria, with newspapers predicting 50,000 deaths in Britain alone.

Surely the great Anglo-Saxon Empire will have to stir its heavy frame - taking its fat derriere up out of the imperial easy chair - and panic. The troops will have to be called out. Places will have to be quarantined. People will have to be inspected, approved, and given permits to walk the streets. Oh...and police the Internet. You can go on the Internet and find the genetic code for the Spanish Flu virus, a variety of avian flu that killed millions in 1919-1920. It was perhaps the worst biological assault on the human race ever. What is to prevent a terrorist, a madman, or a postal worker from replicating the virus and releasing it on an unsuspecting world? Nothing, say the experts.

So far, only 60 people have died from avian flu. That is about the number of Democrats who have been gored by wild deer or Republicans who have drowned in their own bathtubs. But if the virus gets smart, that is if it mutates in a way that makes it more easily transmitted, the result could be devastating to both parties as well as people of integrity and intelligence. Indeed, the whole species and its economies could suffer greatly.

Unlike the Y2K scare, says a Bloomberg columnist, this bug is for real. If it makes the vital mutation, the death toll could equal that of the Great Plague. So far, half of the people infected with the virus have died. We think of these diseases as carrying off the weak, like a form of natural selection. But the bug of 1919 was a cunning little critter; it suborned the victim's own immune system and turned it against him. Most of the dead were young adults, many of them soldiers back from the trenches, who were strong and healthy.

And even if you are lucky enough not to die, you may find your life disrupted in a major way. Airlines are likely to lose customers, or even be grounded by “flu czars” in various countries. People will avoid unnecessary travel, shopping, entertainment; they will stay at home and try to stay away from public places. Schools may be closed. Public events will be cancelled or postponed. Office buildings will be emptied. Businesses may close, or move key teams to “safe” areas...where they can work in isolation. Sales will plummet, except for stockpiled items such as water and toilet paper. Businesses will fail. Economies will collapse. Stocks and property prices will fall sharply, as buyers disappear. Foreclosures and bankruptcies will soar.

There will be a financial panic as well as a health panic. International trade will be curtailed (America's trade imbalance will be resolved in the worst possible way...so will its property and debt bubbles.). People will flee to the safety of U.S. Treasuries, and gold...and the wide-open spaces. More below....

*** We are still laughing at U.S. Treasury Secretary John Snow. The man is visiting China, advising the Chinese to “spend more, save less,” and learn how to use “sophisticated” financial products from Wall Street.

Meanwhile, from Slate comes a report on one of America's most sophisticated financial businesses:

“Refco was a model 21st-century business - a highly digitized, high-tech services company that traded complicated financial instruments on behalf of customers all over the globe. But its meltdown shows that its real assets were not its New Economy algorithms and brainpower. Rather, this extremely modern company depended ultimately on the kind of assets that built American capitalism in the 19th century: trust, integrity, and the personal reputation of executives.”

Refco was, coincidentally, the outfit that helped Hilary Clinton trade cattle futures. Thanks the firm's sophisticated techniques, it made sure the former first lady was one of the most successful traders of all time. Every trade was a winner. More recently, it paid off its former CFO with a $46 million check when he left a year ago. The company went public in August. It was briefly worth $4 billion. Now, it is a carcass being picked over by vulture funds.

*** “The best way to think of the Refco meltdown is as a modern-day bank run, says our good friend, former banker and Capital and Crisis' editor, Chris Mayer.

“In the old days, when banks had to stand on their two feet - and couldn't depend on the Fed for a lifeline every time they fell through the ice -depositors were the watchdogs of the banking industry.

“Even a whiff of scandal, whether it threatened the bank's solvency or not, could send depositors lining up for their money back. Essentially, this is what happened a Refco. Refco is in the trust business. It helps facilitate trades and people trust it to settle transactions.

“When the market found out CEO Phil Bennett owed the company $430 million, its image was tarred. Customers no longer trusted Refco. Like bank depositors of old, they pulled out. And a 150-year old company - just like that - is in bankruptcy only weeks after the initial scandal broke.”

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.