... however, this explanation implies a VERY SCARY future ...
(snip)"The conventional wisdom just six months ago was that big liquidity providers like Fannie Mae and Freddie Mac could ride to the rescue. Now they too are joining a growing chorus of other big financial institutions that need capital (as opposed to providing it) and are being subjected to large first round write offs of fictitious capital (FC). It really ísn´t rocket science to see this turn of events is the kiss of death for a Ponzi based asterisk economy.
So who will rescue George Custer? To say that the US Treasury or the Fed can step in in lieu of GSEs, Citigroup, et al and buy hundred of billions if not trillions in FC is a pipe dream, it isn`t going to happen that way, because government agencies (even if able and allowed to do it) can not control where this additional liquidity goes. The evidence therefore is that they are not really able to even attempt it, and what is attempted is dead on arrival. There will be no rescue, and that bullish pipedream is coming to an end, as are the FC investments of those who believe in it.
On the subject of where presumed additional liquidity goes, it also appears that $100 oil translates into a severe problem. The United States can longer buy commodities on the spot market. And neither increasingly can US Dollar peggers. I believe that is why we are seeing the Japanese Yen breaking away from the US Dollar. However, this inability translates into something else as well, the kiss of death for the Clusterfuck Nation. The US consumes 25% of the world`s oil, and again it doesn`t take a rocket scientist to see that a asterisk nation that consumes energy and commodities in that quantity and is unable buy it on the spot market with US Dollars(except at prohibitive prices) is headed for a huge readjustment in a whole slew of areas. "(snip)
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