Half Way Through Act II
A Naybob of Simian nature sends us the following:
I agree that The Fed seems like it's running out of tools it can use and the credit markets are not turning around.
I don't know if The Fed can just "write off" the bad loans or just retire it somehow-
I've never studied International Finance or Sovereign Indebtedness before-It's really frightful-
I'm not in denial; I really do realize that this may be the worst banking/credit crisis in the history of modern capitalism-
The Financial "engineers" and Wall Street power players and "earners" have really fucked things up to a level really uncharted before
-it's so widespread now-even Target, the department store,
is wondering if there going to see defaults on tens of millions of customer finance charges.
The Nattering One muses... On 08/17/07 we handed you the Act II prologue...
we suggest you re-read that post as Act II is now half way through.
What could the Fed do? In 1929 we were still on the gold standard, today we are not...
so the backstop of last resort is the printing press & helicopter drop, which means further dollar debauch.
The Fed could resort to selling bonds to justify printing the new money.
As they could not retire the existing debt, that would dilute the bond market further...
As of yesterday, our bonds were demoted to the worlds 2nd safest investment for the 1st time ever.
If you think Target is worried about collecting on consumer debt,
the rest of the world is now worried about collecting on our Treasury debt.
This is a Greek tragedy, the initial housing market & debt collapse of Act I is over, Act II is now half way through.
Act II starts with Corporate and public debt joining housing debt to form an even larger vortex,
pulling down all assets, bonds, stocks, commodities, etc. into an economic death spiral.
If you think things are bad now, the engine sputtered in Act I, to finish Act II the engine is stalled and the wheels are about to come off.
This is where the tapped out consumer and emasculated economy lay down next to each other and play dead and the contagion goes global.
Act III is where from the ashes of the first two acts, those who survive, will be greeted by a third plague.
Aside from the plunging quality of US sovereign debt and the compromised integrity of our sovereign state...
due to the fact that our republics executive, legislative and judicial systems are for sale to the highest bidder...
the pension deficit debacle, in which Social Security and the majority of US private pension plans & PBGC declare bankruptcy,
comes into full bloom, making the "golden years" for many, a tragedy indeed.
Perhaps at some point, we do what the French have done several times since WWII,
our currency gets completely revalued, as in 10 old dollars equal 1 new dollar. And "new" dollars get printed up for non domestic circulation.
I agree that The Fed seems like it's running out of tools it can use and the credit markets are not turning around.
I don't know if The Fed can just "write off" the bad loans or just retire it somehow-
I've never studied International Finance or Sovereign Indebtedness before-It's really frightful-
I'm not in denial; I really do realize that this may be the worst banking/credit crisis in the history of modern capitalism-
The Financial "engineers" and Wall Street power players and "earners" have really fucked things up to a level really uncharted before
-it's so widespread now-even Target, the department store,
is wondering if there going to see defaults on tens of millions of customer finance charges.
The Nattering One muses... On 08/17/07 we handed you the Act II prologue...
we suggest you re-read that post as Act II is now half way through.
What could the Fed do? In 1929 we were still on the gold standard, today we are not...
so the backstop of last resort is the printing press & helicopter drop, which means further dollar debauch.
The Fed could resort to selling bonds to justify printing the new money.
As they could not retire the existing debt, that would dilute the bond market further...
As of yesterday, our bonds were demoted to the worlds 2nd safest investment for the 1st time ever.
If you think Target is worried about collecting on consumer debt,
the rest of the world is now worried about collecting on our Treasury debt.
This is a Greek tragedy, the initial housing market & debt collapse of Act I is over, Act II is now half way through.
Act II starts with Corporate and public debt joining housing debt to form an even larger vortex,
pulling down all assets, bonds, stocks, commodities, etc. into an economic death spiral.
If you think things are bad now, the engine sputtered in Act I, to finish Act II the engine is stalled and the wheels are about to come off.
This is where the tapped out consumer and emasculated economy lay down next to each other and play dead and the contagion goes global.
Act III is where from the ashes of the first two acts, those who survive, will be greeted by a third plague.
Aside from the plunging quality of US sovereign debt and the compromised integrity of our sovereign state...
due to the fact that our republics executive, legislative and judicial systems are for sale to the highest bidder...
the pension deficit debacle, in which Social Security and the majority of US private pension plans & PBGC declare bankruptcy,
comes into full bloom, making the "golden years" for many, a tragedy indeed.
Perhaps at some point, we do what the French have done several times since WWII,
our currency gets completely revalued, as in 10 old dollars equal 1 new dollar. And "new" dollars get printed up for non domestic circulation.
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