Monday, Nov 24, 2008
Fed Pledges Top $7.4 Trillion to Ease Frozen Credit
bloomberg: Fed Pledges Top $7.4 Trillion to Ease Frozen Credit
he U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.
The unprecedented pledge of funds includes $2.8 trillion already tapped by financial institutions
Posted by mark @ 11:00 AM (543 views) Add Comment
9 Comments
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1. harold said...
Noteworthy Quote
"The lesson that must be learnt...is that "free market"
capitalism under a fiat money regime does not produce the
same blessings (sustainable prosperity) that are produced by
true free market capitalism within a monetary system
anchored by gold. When President Nixon severed the link
between the dollar and gold, he changed the nature of the
Anglo-American economic model and ultimately destroyed it."
Richard Duncan, author of "The Dollar Crisis: Causes,
Consequences, Cures"
Wake up guys.
2. mountain goat said...
Some great quotes in there.
“The thing that people don’t understand is it’s not how likely that the exposure becomes a reality, but what if it does?”
“If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.”
3. bellwether said...
I have little by view of what should happen and I'm more interested in anticipating what will happen. Over the past few days I'm really begining to wonder if we will see concerted currency devaluation on a global scale aimed at wiping the debt slate more or less clean.
4. Wofmd said...
Agree with Harold. "The Dollar Crisis: Causes, Consequences, Cures" is a MUST read. I think this book was first published in 2003 - and it is certainly playing out as expected.
5. doom&gloom said...
BW. the only wealth-preservation solution is then precious metals, which cannot be devalued.
I wonder if it could be made illegal to possess gold, as it is illegal to possess narcotics?
6. mountain goat said...
Bellwether you may be right. Yesterday when I was replying to a comment I realised why they are desperate to keep the financial system propped up. The reason is if the whole financial system is still there we can get a V recovery from this. The trouble is all this debt and the time it will take to pay it back. If they intend to pay it back it will take 10-20 years of recession. So wiping the slate clean would do this but would be such a moral hazard for the future I think even the criminal finance men hesitate. The key is the foreign holders of US debt. They will need to be protected from loss. That makes a debt amnesty unlikely.
7. bellwether said...
I'm begining to think that the principal creditor China has the more to lose in a deflationary sprial than almost anyone and perversly the most to gain by the continuing with the current situation. Marc Faber in the vid posted on site yesterday seemed to hint at this.
None of this of course addresses long term structural problems that will arise by too many people and not enough resources but then there is really no palatable solution to that.
8. drewster said...
d&g,
In 1933 during the Great Depression the US government did ban private ownership of gold.
I don't know how successful it was; their efforts to ban narcotics haven't been too successful.
9. goweresque said...
Its scarey to remember that the world only really got out of the Depression in the 1930s by the method of creating huge amounts of 'stuff' and then destroying it in WWII. Its easy to keep the workers of the world working when their products are being destroyed as fast as they are produced. WW3 anyone?