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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (5845)4/4/2008 2:44:16 PM
From: stan_hughes  Read Replies (2) of 71402
 
He shouldn't sound so surprised, we've been talking for ages about how the Fed would have no choice but to backstop a major counterparty failure. The only big questions left unanswered IMO are (a) how many of these insolvent banks/brokers is the Fed/USG going to have to take onto their own balance sheet to hold the remaining assets to maturity before this melt is over, and (b) how much is the taxpayer going to end up eating directly by assuming control of questionable assets, and by that I mean over and above what they are already eating by way of currency devaluation and lost interest from artificially low savings rates

If you believe the Fed, the $30B in securities that was seized from Bear really is worth $30B -- it will be many moons before we find out if that representation is BS or not. For now, they will keep spinning the line, "Hey, we made money on Chrysler paper the last time we did this, so trust us, we know what we're doing", while not giving out any data that might enable someone to argue the point

Sinclair should have also pointed out that things could arguably be worse -- at least the US is able to print its way out of its mess by diluting its currency -- that's not even one of the choices for EU members
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