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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: piggington who wrote (31148)4/25/2005 2:03:34 PM
From: jackjc  Read Replies (1) of 110194
 
I believe this also and have posted it to Mish.

We could have 'emergency' low interest rate fed loans to
cover mtg and other debt, as the gov does in other
emergency situations, especially for those who lose jobs
or have other defined 'emergencies'.

There is no need to have cascading defaults if gov covers the
default converting it into gov 'loan'.

And the several million new gov workers required to handle
the 'emergency' paperwork and myriad of qualification
parameters wil help the unemployment problem.

Just the announcement would prevent walking away from homes
under water etc, expectation would be that gov would help
pay for it and loan would be forgiven eventually. Would slow
the process and reduce fear.

We can't have pyramiding defaults, where savers wind up
with the assets at a discount. Need to balance the loss
as evenly as possible by printing and guaranteeing.

Of course I don't expect gov to be successful in full, but
I don't expect deflation slipping down out of control.
Gov can pay the bills with printed money which can not be refused with our legal tender laws. And handling the mess
would provide a lot of work.

Look at what Roosevelt did with his make work projects,
and multiply by 10, with fiat money instead of gold backed.
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