Looking at the U.S., which is not a bad analogy for other parts of the world in terms of bailouts, where is the money coming from? One answer:
... and:
... and:
... and:
A certain amount is debt to other countries and though China looms large in this, it is not 50% of total debt, it's far less. China does not seem likely to refuse to fund more debt even though they might not be keen to:
The key might be in the last quote - printing money. Here is a good guide for beginners, despite the look of it. It says that the government can either print money or change the balance sheet, selling securities to the private sector. It goes on:
Standard advice to overcome inflation includes selling shorter, which is what we are seeing - short term buybacks. Even at 0%, it is a safe haven for investors as long as the government guarantee of its fiat money is believed by the people.
In the end, this is the critical point. The government is owned by the Fed in real terms, which is owned by groups like Morgan who make a killing in times such as these, who then decide who is bailed out and who is not.
The moment you mention groups like Morgan, you are talking the world money houses and the real government and so we are back, legally as it turns out, dependent on their agenda. In other words, the people, in the end, are owned by the old money and subject to its whims for unrest, war and any other turmoil they care to finance.
This is the S and C syndrome [short and curlies]. It's a simple enough rule. If there is an almighty conflagration in the offing, it clearly needs funding and the old money needs to top up its coffers in order to finance it. Crash-depression-unrest-war ... the old formula every time.
The IndyMac debacle is taking a large bite out of FDIC reserves, and if scores of other banks fail in the year ahead, the fund will be depleted. Taxpayers will have to step in.
... and:
To help pay for these bailouts, the government sells securities. And right now, there's plenty of demand because those securities are considered safe in the midst of all the turmoil.
... and:
Lest you think the Fed has run out of ammunition, the central bank, the WSJ reports, has roughly $400 billion left at its disposal and it has a few aces up its sleeves, including lowering interest rates.
... and:
The government hopes to someday sell the toxic securities it buys from the banks.
A certain amount is debt to other countries and though China looms large in this, it is not 50% of total debt, it's far less. China does not seem likely to refuse to fund more debt even though they might not be keen to:
If foreigners like the Chinese go on a buyers’ strike then - it was suggested - the US might resort to printing more money, and that would cause inflation - and a fall in the dollar and in the value of all those treasury bills held by China.
The key might be in the last quote - printing money. Here is a good guide for beginners, despite the look of it. It says that the government can either print money or change the balance sheet, selling securities to the private sector. It goes on:
The true structural cause of persistent high inflation is a fiscal deficit that is not eliminated with cuts in spending and/or increases in (non-seignorage) taxes.
Standard advice to overcome inflation includes selling shorter, which is what we are seeing - short term buybacks. Even at 0%, it is a safe haven for investors as long as the government guarantee of its fiat money is believed by the people.
In the end, this is the critical point. The government is owned by the Fed in real terms, which is owned by groups like Morgan who make a killing in times such as these, who then decide who is bailed out and who is not.
The moment you mention groups like Morgan, you are talking the world money houses and the real government and so we are back, legally as it turns out, dependent on their agenda. In other words, the people, in the end, are owned by the old money and subject to its whims for unrest, war and any other turmoil they care to finance.
This is the S and C syndrome [short and curlies]. It's a simple enough rule. If there is an almighty conflagration in the offing, it clearly needs funding and the old money needs to top up its coffers in order to finance it. Crash-depression-unrest-war ... the old formula every time.
O/T - Is your email working?
ReplyDelete