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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Bill/WA who wrote (12356)	6/13/2003 12:58:34 AM
From: Canuck Dave	Read Replies (2) \| Respond to of 39344

I've read about this on a number of sites. As you correctly conclude, there is no explicit guarantee of the GSE debts, but everyone assumes the US will stand behind them. Their mortgage backed bonds are thus given the highest ratings, meaning they sell at premium prices. Depending on who you listen to, this is either a good thing for the whole economy, or a reckless experiment in money creation. The percentage increase in the amounts of mortgages issued has been nothing less than breathtaking the past few years. If there is a default, the cost of a bailout would be astronomical. Too big to fail, or too big to bail? The key is the US dollar. As Doug Noland points out, the rubber hits the road when foreigners get less from appreciating asset prices than they are hurt by a weaker dollar. It's inflate or die for Greenspan. And they can inflate for only so long. One day there will be a reckoning, and all the fiscal "promises" of FRE and FNM are going to be seen as perhaps rather hollow. A lot of people are going to get hurt. Just my opinion. CD

To: Bill/WA who wrote (12356)	6/13/2003 9:23:34 AM
From: russwinter	Read Replies (2) \| Respond to of 39344

<Opinion?. If the implicit guarantee were actually executed it would bankrupt the government. I think they are running out of guarantors and insurers. Of greater concern is the borrowing capacity (if I understand it correctly?)with the Treasury, as a lot of that may not get paid back. May have already bankrupted the US Treasury. This is an important enough issue that I started a thread specifically dedicated to the credit and bond bubble. I hope this becomes well visited and used "before the shit hits the fan big time", not after? : Subject 54034