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 : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (70350)	9/12/2008 4:35:52 PM
From: Maurice Winn	1 Recommendation Read Replies (1) \| Respond to of 74559

Hi Jacob. Long time no see. It's good to see you again. It looks as though the Federal Reserve is keen to maintain confidence in the US$ as a legitimate currency. Americans have no choice in the matter, other than as electors, meaning that have total choice but it is of course in their interests to maintain US$ as a going concern. We the Aliens have no such impetus. For decades, we have funded the owners of the US$ system via dilution and interest payments. If our confidence is shattered, we will abandon the US$ and that would NOT be good for the owners of the system. They would lose a very juicy profit stream. Already, many have abandoned US$ and more are talking of it. Many have been buying gold. Some currencies are being established on gold. So, it's worth it to Americans and the owners of the US$ system that they make sure that foreigners don't flee. That means giving up some advantage in the short term. By bailing out some of the creditors, it entices them and others to remain in the game. Those of us who are holding US$ suffer dilution, which is annoying and I don't necessarily agree that rescuing Fannie and Freddie bond holders is a good idea. I'm just guessing at what some of the thinking is in doing the bail out. There is probably a political dimension too in the USA in that mortgagors are wanting relief from their debts and don't want to be out on the street. Politicians and Federal Reserve probably think the bail outs helps keep the political system on the straight and narrow. As a holder of US$, and a foreigner, it's all quite annoying. But it doesn't change my overall approach which is to just hold US$ or any currency, only for the short run while I figure out where to put it in more reliable things which actually earn a profit. Mqurice