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

To: benwood who wrote (25084)	12/1/2009 4:47:58 PM
From: Real Man	Respond to of 71406

Yes, a sovereign wash is in process. We pretend we don't monetize the government. We do a lot of pretending, for the sake of confidence. We monetize MBS, do a swap with banks for new treasuries. Banks sell crappy MBS to the Fed, the Fed monetizes them, banks buy treasuries with proceeds. We pretend the Fed does not monetize the bankrupt government (which is oh! Obviously bad.) Instead, they in fact utilize a similar process to clean up the banking system's balance sheet, but only because US sovereign debt is rated AAA. Fiat games. Oh, where did the savings glut come from to keep T-rates from rising? Trade deficit is down, so foreigners can't buy much. Americans are broke. They are not buying. In the end, it's the Fed -g- Message 26141905