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To: BenKenobi
They are all in a panic over the derivative bomb. Our toxic assets were floated out on the world market; inflating assets based on already overinflated assets...betting on useless paper, IMHO.

It went from $243 Trillion in 2007 to $700 Trillion in 2011.

As I mentioned to a friend this evening, the turmoil in Europe actually helped shore up our 30 year notes. The flight from gold to treasuries sure didn't hurt us in the long run.

Unfortunately, we've already reached the tipping point, where growth in the FedGov creates a corresponding contraction in the private sector. That's why counterfactuals on Bush's "rescue" and Obama's stimulus show the economy ending up in the same shape as if they had done nothing at all. We can't keep going down the same path as Europe, throwing money at the problem in the hopes it will resolve itself or attempting to inflate our way out of debt.

Some folks can position themselves to make money in the ensuing tumble, but the majority of Americans can't. It won't be pretty.

12 posted on 10/03/2011 1:56:12 AM PDT by TheWriterTX (Rock you like a Herman Cain 2012)
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To: TheWriterTX

Unwinding them simply has to be done, and best done now. That means *gasp* deleveraging.


14 posted on 10/03/2011 7:43:30 AM PDT by BenKenobi (Honkeys for Herman! 10 percent is enough for God; 9 percent is enough for government)
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