Posted on 05/01/2010 10:33:11 AM PDT by Errant
...if you start to see a great depreciation of the U.S. currency or a tremendous increase in lack of confidence in the soundness of the government's fiscal condition, there is a problem. You mentioned Greece, for example. The sovereign solvency issues there are minuscule compared to what we have with the United States, which is the elephant in the bathtub. The markets know it's there. The central bankers know it's there. Again, with the downturn in the economy, all the issues are going to be brought to a head. As they come to a head, there will be that effort to dump the dollar...
(Excerpt) Read more at marketoracle.co.uk ...
Repeat your question, in English.
I asked you to dispute the claim that the funds would not eventually have to be bankrolled by the taxpayer.
Sorry, I'm practically illiterate...
You may actually know more than the authors or maybe not.
Do they, and you, think the Fed loans out taxpayer funds or not?
"No one has lost money from buying/investing in treasuries to date if held until maturity".
If you bought 30 year bonds in 1970 yielding 4% and held them until maturity you lost (a lot) to the high inflation of the late 70s. Even if the Treasury did not default on your bond.
Of course not. The original funds along with interest rate at time of purchase would be returned to them as promised at maturity. Who is being "silly" now?
You.
You seem to recognize default risk while ignoring every other risk of holding a bond.
Bear Stearns funded their bond book by borrowing overnight while buying longer term mortgage debt (among other things). Suddenly they were unable to borrow overnight money and their long bonds dropped in value.
Does that sound like a risk free trade?
If you can show how a loan by the Fed to a bank is somehow going to be bankrolled by the taxpayer, go for it.
Wasn't the Roman Currency a lot more stabilized by 410 A.D.? It is clear that the currency was still unstable in the early fourth century under Constantine, because he had to introduce a new coin, the Solidus, to restore confidence in the currency after the debasement of the Aureas in the third century. However, even if the currency had been stabilized by the fourth century..... as you pointed out, Rome was sacked by Goths in 410. Thus Rome still lost all of its wealth in the sack and could not recover from the political and economic disintegration.
In any case, you're right, our current situation is in many ways uncannily reminiscent of the beginnings of the Third Century Crisis. (It all started with the emperor, increasing dramatically military spending to fight the barbarian incursions on the frontiers. To pay for this, the Severan emperors went on a spending spree. Obviously, they didn't have the gold to pay for this so they debased the currency by putting less precious metals in the coins. This course of action set off a chain reaction that led to out of control prices, hoarding, black markets, price controls (with death penalty for the non-compliant), food shortages, plague, civil disorder, riots, and political chaos. Rome and the West were never the same again.
Give me a break will ya, I've been trading since before the first trade center bombing...
"Immediate help is needed to ensure the financial stability of the eurozone. This must be done to avoid a chain-reaction to the European and international financial system, and contagion to other eurozone states. There is no alternative."
The following table details how the Fed and the government have committed the money on behalf of American taxpayers over the past 20 months, according to data compiled by Bloomberg.
===========================================================
--- Amounts (Billions)---
Limit Current
===========================================================
Total $12,798.14 $4,169.71
-----------------------------------------------------------
Federal Reserve Total $7,765.64 $1,678.71
Primary Credit Discount $110.74 $61.31
Secondary Credit $0.19 $1.00
Primary dealer and others $147.00 $20.18
ABCP Liquidity $152.11 $6.85
AIG Credit $60.00 $43.19
Net Portfolio CP Funding $1,800.00 $241.31
Maiden Lane (Bear Stearns) $29.50 $28.82
Maiden Lane II (AIG) $22.50 $18.54
Maiden Lane III (AIG) $30.00 $24.04
Term Securities Lending $250.00 $88.55
Term Auction Facility $900.00 $468.59
Securities lending overnight $10.00 $4.41
Term Asset-Backed Loan Facility $900.00 $4.71
Currency Swaps/Other Assets $606.00 $377.87
MMIFF $540.00 $0.00
GSE Debt Purchases $600.00 $50.39
GSE Mortgage-Backed Securities $1,000.00 $236.16
Citigroup Bailout Fed Portion $220.40 $0.00
Bank of America Bailout $87.20 $0.00
Commitment to Buy Treasuries $300.00 $7.50
-----------------------------------------------------------
FDIC Total $2,038.50 $357.50
Public-Private Investment* $500.00 0.00
FDIC Liquidity Guarantees $1,400.00 $316.50
GE $126.00 $41.00
Citigroup Bailout FDIC $10.00 $0.00
Bank of America Bailout FDIC $2.50 $0.00
-----------------------------------------------------------
Treasury Total $2,694.00 $1,833.50
TARP $700.00 $599.50
Tax Break for Banks $29.00 $29.00
Stimulus Package (Bush) $168.00 $168.00
Stimulus II (Obama) $787.00 $787.00
Treasury Exchange Stabilization $50.00 $50.00
Student Loan Purchases $60.00 $0.00
Support for Fannie/Freddie $400.00 $200.00
Line of Credit for FDIC* $500.00 $0.00
-----------------------------------------------------------
HUD Total $300.00 $300.00
Hope for Homeowners FHA $300.00 $300.00
-----------------------------------------------------------
he FDIC’s commitment to guarantee lending under the
Legacy Loan Program and the Legacy Asset Program includes a $500
billion line of credit from the U.S. Treasury.
You'd better go tell your bosses at the Fed there in Chicago that you need more propaganda to spread like the BS artist you are...
Give me a break will ya, I've been trading since before the first trade center bombing...
Wow, you're an old pro. LOL!
And you still don't know about interest rate risk? Event risk? Inflation risk?
Why don’t you take a flying leap into hell... ;)
The following table details how the Fed and the government
Don't change the subject, your original claim was that the Fed was loaning taxpayer dollars.
You'd better go tell your bosses at the Fed there in Chicago
Everyone that points out your mistakes works for the Fed? LOL!
You poor dear. Here’s a tissue.
Keep it sweetheart...
You can change the words and the questions but you can't change the facts can you sweetheart...
If you ever figure out the difference between the Fed, Treasury and FDIC, I’ll be glad to school you some more.
I bet you would darling...
But I'm afraid I like women that are a little more honest in their relationships...
:)
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