Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (13268)	7/22/2012 5:56:30 AM
From: John Pitera	Respond to of 33421

I've seen some very interesting writing and have had a couple of interesting conversations regarding it..... terrence bell wrote a good note, regarding the freezing up of credit in 2008, and the the LIBOR situation. ""because no banker then had any confidence in the solvency of any other banker.." The banks suddenly realized that the values of their assets (CDO) were questionable.and no bank wanted to get stuck with insolvancy. Its fascinating to read in Fridays WSJ that despite the Hundreds of Billions of $ spent/created to bailout assets of questionable value, the federal government still retains and is attempting to auction off those assets(and those assets are mostly bad and uncollectable debts) to suckers or more likey someone/nation who wants to buy influence of a few politicians. This was an inside game between banks and government through the last 2 Treasury Secretaries, Fed Chairman and the NY Fed. We will feel the ramifications for decades. The effects on currency valuations as a result of these bailouts / money expansions continues to exacerbate the problem. "The endeavors to *expand the quantity of money in circulation* either in order to increase the governments capacity to spend or in order to bring about a temporary lowering of the rate of interest disintegrate all currency matters and derange economic calculation." Ludwig Von Mises Human Action" ------------------------------------- Michael Kelly had a very good reply as to how the LIBOR market ended up in London: "In the 1960s, the US government instituted a series of currency controls and a tax that encouraged non-US banks to hold their dollars outside the United States. London promised never, ever, ever to tax interest in this new "Eurodollar" market. The Soviets, who had to hold dollars to buy oil, also encouraged the growth of the Eurodollar market. Once the market developed, it proved impossible to bring that market back to the United States. (The tax on deposits was repealed and everybody yawned.) Non-US firms and governments liked not being under the meddlesome watch (and taxes) of the US government. So, here we are 50 years later, with the most liquid and important market for dollars not in New York, but in London.