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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (16230)	1/11/2009 11:08:30 AM
From: Real Man	1 Recommendation Read Replies (1) \| Respond to of 71456

The collapse started and brought down a few large derivative players. The Fed and the treasury have propped the derivative markets ever since 2002-2003 (this is way too late for the actual timing when it all started; 1987 is more like it; but... in 2002-2003 this became the core of US/treasury/Bush policy - prop the markets by timed liquidity injections into derivatives so the economy recovers, a fake recovery at best and a Ponzi finance economy) and never stopped propping it, so it all happened despite the Fed. Yes, they took the counterparty risk. 9 Trillion or so. The inevitable? The Ponzi scheme collapses, takes down all the guarantors, the Fed and the treasury, and that IS the currency run mentioned in the head of the thread. The whole thing was NOTHING NEW under the sun. It was a continuation of complete idiocy that led us into this mess. The monster got huge, and required a lot more feeding. Without that the whole house of cards would be down already. The known fact about Ponzi schemes is that fast growth is absolutely required or the Pyramid collapses. Thus, even a 5% decline is the beginning of collapse. The collapse just happened in a part of the universe, the CDS. The bulk is being supported by the treasury bubble. Fed sets rates and monetizes the curve to NOT let the thing unravel.

To: carranza2 who wrote (16230)	1/11/2009 2:59:01 PM
From: axial	Read Replies (1) \| Respond to of 71456

Exactly! "The scheme continued con brio after subprime's problems became known. One of the articles you cited mentions a factual tidbit I once knew but had forgotten: notional derivative values increased after the bailouts began." It would be easier to understand things if derivatives were being eliminated, even gradually. There's been muted international talk, not much else. There are other structural and economic problems to be solved before a true recovery can begin. But unless derivatives are eliminated, there can't be a true recovery - for the US or for the global economy. If I understand, derivatives will fail - but only when default guarantors fail, themselves. Until then, everybody just talks the talk... and after that? So globally, everybody just "papers" it over, but we don't stop the toxic practice. We're putting out the fire at the taxpayer end, and adding fuel at the other. Is that it? Jim