Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: carranza2 who wrote (76919)	3/26/2008 1:32:49 PM
From: maxncompany	Respond to of 116555

I don't know exactly how you could structure a global bailout. Even if you could, aside from an initial false sense of euphoric relief, people would awaken to the huge gobs of money necessary to make that happen. There would be the obligatory PPT punishing of gold to make things look good, but I expect gold would then do quite well, rather than poorly.

To: carranza2 who wrote (76919)	3/26/2008 2:18:18 PM
From: stan_hughes	Respond to of 116555

Re: "cancelling" CDS, a lot of your friendly neighborhood financial institutions need those CDS to stay in place and ultimately to be honored by somebody, because the original revenue source has stopped paying. That's why they bought the credit guarantee in the first place So cancelling them as you suggest would not have the effect you're hoping for -- quite the opposite, actually As for gold, since under either a failure or a cancellation scenario as you suggest, the US government would be called upon to make good on the CDS guarantees in order to prevent all those friendly institutions from failing. As such, the Treasury would have to print money like no tomorrow to meet the obligation, severely diluting the currency and thereby driving up the value of gold in USD terms There is no easy way out of this mess -- if there were, they would already have taken it