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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (76456)	3/19/2008 4:23:22 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 116555

Don't put garbage into the Federal Reserve. Paul Volker says we should put the garbage in Fannie Mae where it belongs - at the expense of the U.S. Treasury. Paul Volker on "Charlie Rose" Tuesday March 18, 2008, was not what I wanted to hear. charlierose.com Volker says the Fed has already done what it can and in his estimation it falls short of what is needed. (Not a surprise) What does he suggest? I was disappointed to hear him suggest that Fannie Mae and Freddie Mac need to tap their line to the U.S. Treasury to stabilize the mortgage market by buying mortgages - or some other institution needs to be created to do this. Volker pointed out that Fannie Mae was a government institution until the 1970s when it was semi-privatized to get it out of the budget, so this move would not really be so unprecedented. This is what Japan did with their "Home Lending Corporation" which made home loans at below market rates directly from the Japanese Treasury. It's not like that solved any problems. He said this mortgage problem is global because so many institutions around the world invested in our mortgage securities, so he feels the US needs to stabilize this market for our own economy and the world economy. Volker said these problems demonstrate the need for more stringent regulation of the mortgage industry and compensation which rewards risk-taking while saddling others with the eventual loss. But first the immediate problem needs to be addressed. Volker says he is hurt that the Swiss Franc is now worth more than the US Dollar (it used to be 1/2) and we face an inflation situation like the early 1970s when the inflation problem of the late 1970s to 1980s he faced began to get started. This may prove to be another link to this video _ video.google.com Neither of the video links are ready yet at the time of this post. .

To: mishedlo who wrote (76456)	3/19/2008 8:42:03 AM
From: Dan3	Respond to of 116555

Re: 50% inflation does not do a god damn thing for someone without a job except bankrupt him. For that matter, since wages aren't going up, 50% inflation bankrupts everyone. Please note that I don't think this a good thing to do - quite the opposite. But I still think it's important to never forget that the controllers of a currency can trash it if they want to - and it looks like they want to. Regards, Dan

To: mishedlo who wrote (76456)	3/19/2008 9:05:42 AM
From: Mike Johnston	Respond to of 116555

50% inflation does not do a god damn thing for someone without a job except bankrupt him. For that matter, since wages aren't going up, 50% inflation bankrupts everyone. Think of what that would do to interest on the national debt. Thus Such talk as a solution is absurd and Bernanke knows it. Since 2002 total inflation has been around 100% , no matter how you look at it, much more than 50% that the argument is about. So far this inflation has not increased interest rates, since it is low interest rates that caused this inflation. There is no limit to a potential currency devaluation by authorities.