To: Lucretius who wrote (7486 ) 2/7/2000 6:27:00 PM From: pater tenebrarum Read Replies (3) | Respond to
the sellers are likely the bullion banks, and /or GS and other investment banks. in any event, somebody has taken on the risk. that's the one feature of the current financial system that virtually guarantees bailout after bailout: the risk is always system-wide, since derivatives are a zero-sum game. Northern Trust recently opined that bubble boy won't be so quick coming to the rescue of the markets next time around since inflation is on the rise (all inflation indicators ex BSL's say so). NT's Kasriel thinks that means the Fed can't cut rates again when trouble hits, because it would risk overheating the economy and the markets even more and spark an outbreak of run-away inflation that way. guess what, the current cyclical upspike in inflation is a direct result of the last bailout. however, Kasriel's thinking is flawed. why do you think the speculators keep on flipping bubble boy the bird when he comes with his measly 25bp. hikes? because they KNOW they will be bailed out again. what other choice is there? if he refuses to bail the markets out over inflation concerns, the whole system could simply melt down because one or two hedge funds have been betting the wrong way...
