Get ready for interest rates, inflation and gold to soar. I've got it covered for interest rates (PST), gold (GLD) and inflation is gonna drive'em (along with the FED trying to peddle $1T worth of bonds to pay off their crooked bank pals). I love ETFs!!
at the end of last week, financial institutions around the world had declared about $500 billion of losses connected to mortgage backed securities, and Bloomberg and other financial press had articles stating expected losses to be 1.2 to 1.6 trillion, with a few articles pegging "it" at 2 trillion.
and the US government had stepped in to cover some of those losses, to prevent outright insolvency.
i don't understand the situation. i know those mortgage backed securities are connected to a much larger amount of credit derivatives. the financial media describes a pool of those products, in the range from $60 trillion to $300 trillion.
there's a guy named Satyayit (spelling ?) Das, one of the finance math whizzes who wrote a primary textbook on credit derivatives.
i think it will take a few months, maybe 6 months, to understand this, other than that the US government has added another $1 trillion to the national debt, in addition to some portion of the $5 trillion Fannie Freddie debt, on top of the existing $9 trillion debt.
in order to continue doing business this way, the US government needs people to keep loaning them money. admittedly the government can also print money. "what are we getting for the money we loan the United States". for a while, the answer has been partially clear - the Chinese loan the US money, we buy the stuff they make in their factories.
i would say we are living in historical times. How the Hell is the US going to pay the interest on that debt ? banks in Canada offer 3.5%; the Canadian government - and the economy - are in much better shape than the US economy. if you were a manager for a sovereign wealth bond e.g. in Kuwait or Saudi Arabia, would you buy US bonds yielding 3% or Canadian government bonds yielding 3.5% ? there's some politics involved, Saudi Arabia & Kuwait want us to buy their oil.
3% interest on $9 Trillion + $1 Trillion + some amount of Fannie Freddie debt.
that's $300 billion plus. the annual interest on our national debt.
and the US government had stepped in to cover some of those losses, to prevent outright insolvency.
i don't understand the situation. i know those mortgage backed securities are connected to a much larger amount of credit derivatives. the financial media describes a pool of those products, in the range from $60 trillion to $300 trillion.
there's a guy named Satyayit (spelling ?) Das, one of the finance math whizzes who wrote a primary textbook on credit derivatives.
i think it will take a few months, maybe 6 months, to understand this, other than that the US government has added another $1 trillion to the national debt, in addition to some portion of the $5 trillion Fannie Freddie debt, on top of the existing $9 trillion debt.
in order to continue doing business this way, the US government needs people to keep loaning them money. admittedly the government can also print money. "what are we getting for the money we loan the United States". for a while, the answer has been partially clear - the Chinese loan the US money, we buy the stuff they make in their factories.
i would say we are living in historical times. How the Hell is the US going to pay the interest on that debt ? banks in Canada offer 3.5%; the Canadian government - and the economy - are in much better shape than the US economy. if you were a manager for a sovereign wealth bond e.g. in Kuwait or Saudi Arabia, would you buy US bonds yielding 3% or Canadian government bonds yielding 3.5% ? there's some politics involved, Saudi Arabia & Kuwait want us to buy their oil.
3% interest on $9 Trillion + $1 Trillion + some amount of Fannie Freddie debt.
that's $300 billion plus. the annual interest on our national debt.
Sadly the lobbyist were also the ones who got the rules changed and the regulations dropped which allowed for this crap to happen.
Modelworks
Lifer
- Feb 22, 2007
- 16,240
- 7
- 76
OrByte
Diamond Member
- Jul 21, 2000
- 9,302
- 144
- 106
the more I think about it the more upsest I get too.
I see the fed bailing out banks...but consumers and SPENDING is where the real problem is.
what good will it do for banks to get bailed out, if we as consumers, tax payers, and spenders are still getting stagnant incomes, higher insurances, higher costs of living, and less and less high wage jobs?
for example, Im everyday joblo american. Im glad the banks got "bailed" out...but they aren't going to lend to me. My debt is too high, my credit scores are too low, my income is NEVER enough...so wtf does it matter to me? I can't spend any money, and ultimately how is that helping the economy? This economy is built on spending PERIOD.
Why do I get the feeling that middle america is getting fvcked in the bvtt again? because ultimately us tax payers are going to be the ones "bailing" out the banks.
Am I on the wrong track here?
Private profits and then public funded bailouts, when are we going to say "NO" to Corpor(crooked)ate welfare?
Don't worry about the deficit peeps...it's all make believe anyway.
Also, everyone MUST be willing to protest heavily when in ~5 years we have a choice of having our Social Security benefits (to include Medicare) significantly reduced OR defaulting on a LARGE portion of our National Debt (the part we owe to the UK, China and Japan and NOT the part we owe to the Social Security Trust Fund/ourselves). Oh...don't worry, when we default on the debt, interest rates will only be 40% and inflation 70% for a year or so before the world forgives us and we go back to buying things from China, etc.
And buy as much gold now (via ETF of GLD) and sell it when gold hits ~$3k/ounce in ~4-5 years.
Also, everyone MUST be willing to protest heavily when in ~5 years we have a choice of having our Social Security benefits (to include Medicare) significantly reduced OR defaulting on a LARGE portion of our National Debt (the part we owe to the UK, China and Japan and NOT the part we owe to the Social Security Trust Fund/ourselves). Oh...don't worry, when we default on the debt, interest rates will only be 40% and inflation 70% for a year or so before the world forgives us and we go back to buying things from China, etc.
And buy as much gold now (via ETF of GLD) and sell it when gold hits ~$3k/ounce in ~4-5 years.
Engineer
Elite Member
- Oct 9, 1999
- 39,234
- 701
- 126
Per Yahoo news, the Bush administration is asking Congress for $700,000,000,000 for the bailout. Nice <insert barf icon here>. That will place next years deficit to $1,280,000,000,000 (1.28 trillion expected).....for one freaking year!!! :shocked: and 
IronWing
No Lifer
- Jul 20, 2001
- 69,041
- 26,920
- 136
Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"
- Treasury Secretary Henry Paulson to Wall Street, Sept 20, 2008
Or even more to the point:
:music:
Hail the day so long expected,
Hail the year of full release.
Zion's walls are now erected,
And her watchmen publish peace.
Through our Shiloh's wide dominion,
Hear the trumpet loudly roar,
Babylon is fallen to rise no more.
All her merchants stand with wonder,
What is this that comes to pass:
Murm'ring like the distant thunder,
Crying, "Oh alas, alas."
Swell the sound, ye kings and nobles,
Priest and people, rich and poor;
Babylon is fallen to rise no more.
Blow the trumpet in Mount Zion,
Christ shall come a second time;
Ruling with a rod of iron
All who now as foes combine.
Babel's garments we've rejected,
And our fellowship is o'er,
Babylon is fallen to rise no more.
:music:
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"
- Treasury Secretary Henry Paulson to Wall Street, Sept 20, 2008
Or even more to the point:
:music:
Hail the day so long expected,
Hail the year of full release.
Zion's walls are now erected,
And her watchmen publish peace.
Through our Shiloh's wide dominion,
Hear the trumpet loudly roar,
Babylon is fallen to rise no more.
All her merchants stand with wonder,
What is this that comes to pass:
Murm'ring like the distant thunder,
Crying, "Oh alas, alas."
Swell the sound, ye kings and nobles,
Priest and people, rich and poor;
Babylon is fallen to rise no more.
Blow the trumpet in Mount Zion,
Christ shall come a second time;
Ruling with a rod of iron
All who now as foes combine.
Babel's garments we've rejected,
And our fellowship is o'er,
Babylon is fallen to rise no more.
:music:
Pliablemoose
Lifer
- Oct 11, 1999
- 25,195
- 0
- 56
Originally posted by: Engineer
Per Yahoo news, the Bush administration is asking Congress for $700,000,000,000 for the bailout. Nice <insert barf icon here>. That will place next years deficit to $1,280,000,000,000 (1.28 trillion expected).....for one freaking year!!! :shocked: and
Treasury hack Paulson said "this will cost the tax payer less than the alternative".
No one bothered to ask why it should cost the taxpayer anything at all.
It's simple arithmetic. Shifting losses from those who should bear them (stock and bond holders of failing companies) to the taxpayers is not going to save the taxpayers a penny,
instead it is going to cost us $1.2 trillion.....
This is utter and complete BS. Let the friggen market crash. All those wall-streeters basically made off with the money and we're paying for their bums. Let them jump off the empire state building I say! Hmm, we could hurt for a few years with a big downturn, or we can bury ourselves in debt and hurt ourselves over several decades. What's nice to know is a huge chunk of congress won't be around to pay off the debt, while the rest of us have to. It's time for a revolution folks.
GeezerMan
Platinum Member
- Jan 28, 2005
- 2,145
- 26
- 91
I caught that, then I thought maybe persecution is a better idea. Did you catch Robin Williams comment on TV last night? He said what is Bush going to do after he leaves office? He can't go on a speaking tour. That was funny, but I bet there will be plenty of people wanting him to speak.
As much as I love to blame everyone's favorite pincushion, other brances (ie Legislative branch) has the equal share of the blame. We need to VOTE ALL THE BUMS OUT!!
It's not the people, it's the system that allows those with the most to gain to donate huge sums and dominate the government.
If you throw these bums out, the next ones will be the same, because the system is the same, where money = winning campaigns, and it comes from these interests.
The only thing I see for people to is grass roots - talk to others, support independant media, donate to the progressive candidates.
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