I still think Goldman is positioning themselves for the eventual HUGE re-alignment of the US$/Chinese Yuan currency cross rate. This decision to let the Yuan trade freely will be the big political coup they will exploit in my opinion.
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Couldn't help but think that Faber was thinking of Goldman Sachs when he wrote this allegory!!!!
Message 23183055
*****"The deleveraging of this carry trade led to "relative
illiquidity", which the island's central bank had to
offset with even more liquidity injections, which while
stabilizing asset prices led to even greater loss of
confidence in the soundness of the island's currency,
and in its bond market, which by then was mostly owned
by foreign creditors.
As Mao Tse Tung had observed much earlier, there was by
then "great disorder", but the situation was "excellent"
for the Smartos. On the short end, interest rates had
been cut so much that they were in no position to
compensate for the continuous depreciation of the
island's currency. So, the Smartos and the Bush tribe's
elite began increasingly to borrow in the island's
currency and to invest in foreign assets and precious
metals.
In fact, the island's central bank, by its market-
supporting interventions, encouraged this process.
Stocks and bonds were dumped on to the central bank and
the Treasury's plunge protection team at still high
prices, and the proceeds were immediately transferred to
foreign assets and precious metals, which appreciated at
an increasing speed compared to the island's assets,
which suffered from the continuous depreciation of the
currency.
And in order to facilitate this trade, the Smartos, who
controlled both the Fed and the Treasury, continued to
make positive comments about "a strong currency being in
the best interest of the island". Sure, it would
have been in the best interest of the island to have a
strong currency, but it was certainly not in the best
interest of the Smartos, who had devised their last
grand plan: shift assets overseas and into precious
metals, let the currency of the island collapse, and
then repatriate the funds and buy up the remaining
assets of the Bush tribe's middle and lower classes at
bargain prices since they had never understood that
their currency had collapsed against foreign currencies
and against gold.
dailyreckoning.co.uk;******
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Just my opinion that the robber barrons at Goldman will benefit greatly from some political decisions coming soon enough.
Remember Exxon Mobil and Sliders "cash hoard" comments??? Why drill and explore when the prime assets in Iran may be "given" to you??
Rogue |
