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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (107383)	2/18/2010 3:37:29 PM
From: GST	1 Recommendation Read Replies (1) \| Respond to of 110194

<is this a prelude to shutting down QE> The US government will run a $1.5 trillion dollar deficit. the States are insolvent. Public pension plans are insolvent. The 'hold-your-nose-and your-your-breath' approach to forestalling a viscious mark-to-market cleansing of the housing market with its endless millions of bankrupt and underwater homeowners is unsustainable, and the consumer and lender of last resort -- China -- is starting to smell the green tea. That leaves Washington with one of two choices -- allow market forces to drive interest rates much higher and brace for the inevitable consequences of debt default that will wipe out the net worth of owners of loans gone bad and wipe out the asset values that to this day are being propped up by easy credit, OR, print bogus bills in quantities so large that the dollar crashes. This will be a primarily political decision -- which one sounds more likely to happen? Exactly -- and that is why gold is where money is heading even as the IMF announces its next big dump of its only marketable asset.