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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (251986)	6/4/2010 9:04:41 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

The massive consumer and business debts, unsupportable by the incomes of those who owe it, don't get paid due to bankruptcies and foreclosures. That's plainly obvious. The government is on the hook for FDIC claims. The money created to replace the saver's Dollars will offset a small portion of the "money" which is vaporized, so an inflationary effect which means slightly lower price deflation. The government has never guaranteed Fannie Mae debt, and if we're smart will not - which would be very bad news for investors and pension funds and life insurance firms around the world. This way the pain is over in a few short years. The alternative is Japan, which has provided "stimulus" money for 20 years leaving them still in an economic depression with the largest government debt to income ratio in the world. No nation has ever inflated their debts away, as interest rates rise in an anticipatory manner. So not only would an expansion of the monetary base not fix the problem, but it would wipe-out much of the wealth of the wealthy people who effectively control our government. Which explains why the Fed has not increased the amount of Permanent Reserves for decades. All of the new "money" is offset by an equal amount of debt. .