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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Broward Horne who wrote (80311)3/24/2007 2:44:00 PM
From: Elroy Jetson  Read Replies (1) of 110194
 
Inflation and monetary devaluation is one possible "solution" and the one the Fed seems to be turning to first, and the solution preferred by the IMF.

But inflation inflicts immense economic costs in addition to the costs inflicted on savers and pensioners tied to the dollar.

There are other solutions, such as the destruction of the mortgage lenders and borrowers through defaults.

If the majority of potential losses resulting from mortgage defaults truly lies outside of the banking system, as the Fed assures us is the case, I think this may end up being the likely longer term solution.

This "solution" also involves pain for many pensioners and savers, although they may not realize this is how their money is invested.
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