That's pretty much what everyone did last year. The Fed's
response was not unique. It was quite parallel to Britain's
(which had a worse Re bubble IMHO). It was not done out
of conspiracy theory. It was a universal response to
all this crap blowing up. Either you print some and give
it to the banks, or you print some and give it to the people.
Net-net the result is the same. The banks paid bonuses instead
of restarting lending, because they know the game is over,
and they know their balance sheets (Something they
no longer honestly report). Besides, it is true that a bonus
on WS is essentially the 13-th paycheck. So,
while folks are outraged, the culture is different.
TSHTF happened last year, now we are just rolling forward.
Gonna take some time, and I bet even the Fed's current
prediction (unemployment coming down in 6 years) will prove
to be optimistic, with more possible blowups along the way.
In 2010 it will be some countries. -ng-
My "theory" on why WS is paying huge bonuses is rather simple -
they know. So, rats are leaving the ship at the expense of
shareholders. They were the ones to buy the lows, now hoping
to unload on J6P at high prices, but I don't think they will
find J6P buying. J6P is broke and is not benefitting from
stock bull. So, stocks will roll over in due time, unless
of course, Ben unleashes a printing tsunami, for which I
am prepared. It is quite possible for him to devalue the
dollar 10-fold. He's the type who will do it. -g-
As long as unemployment stays this high, they will keep
printing and stimulating, which looks very bad for the dollar
in the longer run. Sell your gold only if you truly believe
we'll get out of chit soon. |
