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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 368.31

+0.6%

Nov 7 4:00 PM EST

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To: Maurice Winn who wrote (26735)	12/23/2007 9:15:09 AM
From: carranza2	Read Replies (2) of 217639

C2, I get the impression there hasn't really been a lot of damage yet. True enough, but in time the damage will be felt. The effects will be a reduced level of consumer spending and reduced activity in all sectors which depend on real estate for their vitality. This of course is a huge part of the US economy. The effects will be global as the American consumer's purchasing power is an enormous driver of global exports. It will be interesting to observe the reaction of Sovereign Wealth Funds to the bargains the bursting of the bubble is going to present. Their capital injections may very well soften the effects of the bursted bubble. I cannot recall the last time in modern history that nations funded what are in effect hedge funds. Unlike hedge funds, whose goals ae to make money, the objectives of these national funds will be both commercial and political, which will make the future very intereting. I suspect that the countries whose resources and corporations will become the targets of these funds will act politically to prevent the wholesale sell-off of assets. I cannot imagine any country will, for example, allow a member of the People's Army to sit on the board of ExxonMobil. I am exaggerting, of course, but you get my meaning. Big Ben, true to word, has loaded the helicopters and Uncle Al KBE has even cut right to the chase and said to issue bank notes to home owners. Central bankers around the world are manning the pumps. Remember at all times that Warren Buffett has said that derivatives are the financial weapons of mass destruction and that the US$ .5 Trillion injection by the ECB was in response to solvency issues. Also remember that a senior Fed official has remarked negatively about solvency. It is quite possible that the financial crisis is much worse than it appears. Simply dropping dollars on it is a temporary solution akin to giving the drug addict more heroin. The piper will be paid. Your regared for Greenspan is a mystery to me. He is singlehandedly responsible for a great deal of our present fix. The increased liquidity he injected into the financail system led directly to the real estate bubble. His positive comments about adjustable rate mortgages were over the top. There was also a failure/corruption of the rating agencies and a complete failure of regulation over the financial frauds who packaged the mortgages for sale. A perfect storm of greed and foolishness.

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