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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Siddhartha Gautama who wrote (81174)	9/20/2008 1:57:31 PM
From: Real Man	Respond to of 94695

If the government makes low downpayment loans available, then it might. The government sure can print on a grand scale to get everyone out of debt, but there is definitely a price tag - things mite become a bit more expensive around here. The government did not print. They just take the bad loans, issue treasuries, and USA as a whole winds up with more debt. Taxpayers bail out banks. No new money created (so far)

To: Siddhartha Gautama who wrote (81174)	9/20/2008 2:32:59 PM
From: Real Man	Respond to of 94695

There is an effective downgrade of USA as a country involved in the process, since the debt the taxpayers took on grew by a few Trillion. USA already owes 9 trillion, so such additional debt is not too bad. When doubt is cast as to whether the government can ever repay the debt (in the same dollars), then a really nasty BK, a currency run, will happen - folks start selling dollars in panic, treasury rates will spike higher, and the markets will crash. However, even with a few trillion added, the debt of the USA so far remains at a managable level compared to other developed countries, and nobody around the world really wants a dollar run. Nevertheless, if the scale of this operation spooks the foreing treasury holders, real nastiness will start. Nobody knows the answer to if or when -g-