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Strategies & Market Trends : US Inflation and What To Do About It -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (61)	5/9/2010 3:09:22 AM
From: rr_burns	Read Replies (1) \| Respond to of 1504

Hmm the IMF is (probably) allocating 40 Billion EU a year for next three years to Greece as a bailout. SO, what exactly is that bailout? Turns out these are effectively bonds against the SDRs ( special drawing rights) in the IMF. en.wikipedia.org These in turn are financed, currently, 44% by the usa. (and 34% by the "EU"... no wait that cannot be right. Uh... but that is what the page says. and 11% by the UK. ( table bottom right on this page: fx.sauder.ubc.ca ). Do I have this right?: 1) 2001 thru 2008 GS,Lehman et.al. flood the global market with sub prime paper that creates a liquidity crisis in the asset backed security mkt when it is found to be basically fraudulent paper. 2) the liquidity in the "SYSTEM" is rescued at the 11th hour by the FED effectively absorbing the subprime debt ( to the tune of 95% or so)... which is essentially a printing of cash on the banks books. 3) The clock ticks forward 365 days or so and a collection of euro countries are at edge of sovereign default on their "bonds". Greece happens to be first in the queue. 4) This week the brown stuff and the fan have a collision; somehow this lands on the US markets on thursday, triggers a massive market yoyo. Effect: US$ is waaaaay up. 5) IMF "gives" ( what exactly moved?) greece 40BN Eu. 0.44 of it is US $ ( recently created in last year or so, and suddenly rising in value this week because of contagion fear...) 6) Greece, and the EU countries in trouble are basically being IMF collateralized, today, on paper that was printed this past year to cover a fraud from the past 10 years. In so doing, this somehow is preventing rabid inflation in the US$ because of "demand" for the US$ as a 'safe currency'? 7) For the sake of argument, this can happen may 3-5 times more (Greece, Portugal, Ireland, Spain and Italy, UK all in different stages of collapse today) then what happens? Note, that 45% of the IMF collateral is in fact their own (34% EU+11% UK). 8) no wonder Germany is pissed off at this. They are being sucked into a vortex of doing "the sub prime" thing ( collateralizing a loan with a nothing, polished up to look like the crown jewels). 9) Why is this not just a plain old check kiting operation? en.wikipedia.org The banks used their induced panic to "rescue the system" last year. Who, now, rescues the rescuers? Aliens from the Andromeda galaxy maybe... Or perhaps the story is to keep every one jumpy so that no one really sees what is happening?