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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (15856)12/31/2008 8:16:47 AM
From: carranza23 Recommendations  Read Replies (1) of 71402
 
Indeed. The phrase 'vendor financing' resonated loudly between my ears when I read it the other day.

But let's not forget that what has happened nationally can [and has, in my view] happen internationally. I mean by this that the US can be seen as an international subprime debtor and the Asians can be viewed as the imprudent lenders. Just as the local real estate lenders were happy to lend so that toxic mortgages could be bundled and profitably sold to the suckers, the creditors in this Big Game were content to play currency games and repress local consumption and increase savings in order to accumulate the equivalent of the fees the Wall St. thugs charged the buyers and sellers of their ABS crap.

In a word, the local US financial crisis is a good analogy for what has taken place internationally in the last couple of decades. A circus of imprudent lending and borrowing.

All are in a fix together and all lose but who loses the most?

Who bails out the lenders in this international game? Who bails out the debtors?

I think the answer is obvious. They bail out each other via some sort of accommodation, otherwise they both go down. The problem is the mechanism for such an accommodation. I am not sure one exists.
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