Posted on 08/30/2011 10:09:59 PM PDT by blam
That's what the Fed is for; they can easily pump 50 billion into BoA by zero interest loans that BoA loans back to the government (i.e. politicians). Everybody wins except the dollar and savers and long term investors and economic viability. But I wouldn't bet against Buffet this time, he'll get his 6% / year, maybe next time.
I hope that the wun or any of his legions of sheeple won’t try anything dumb between now and then. I will feel better in Jan. 2013 when he is out of office.
Guns are not as simple to operate as they look, never mind tractors.
I believe the real reason they cannot be discharged is because the loans are government backed, and like taxes, money owed to the government cannot be discharged by bankruptcy. If you default, the taxpayer takes the hit and so the law is designed to protect the taxpayer. Amazing concept eh?
Ah ... but you are missing the amazing wonder of inflation. A 42% note can easily be paid if you initiate runaway inflation. If you have inflation of 100% over a year, 42% inflation means that 1 year from now you owe money with 71% of the buying power of those dollars today. Since inflation is across the board, it is usually associated with devaluation of the currency, but in Greece, the currency is the Euro. The other countries realize this, and so they desperatly want to decouple Greece from the Euro, but cannot. Therefore, the only real solution for them is to prop up the Greek economy. The Greeks, knowing this, are reluctant to make any real changes to reduce thier government debt, so you have a standoff.
The article mentions the end of the Euro as one likely way out, and this is why. Buying Greek bonds at 42% is a great deal as long as Greece is part of the Euro. The second they are not ... sell sell sell.
I don't think we need to worry about that. There's some sane people running things there. However, I can see it definitely happening if Pakistan, Iran or with any other group of Muslims having the bomb - no sanity there.
I'm surprised something like that didn't happen 10 years ago.
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