Sep 7, 2008 Manipulation? Or simply deleveraging? Bob...
Rated • 1 review • economics, politics, gold • 321gold.com
From the page: "Today, Sunday September 7th, the US government announced formal nationalization of Fannie Mae and Freddie Mac. A big reason was that the Bank of China was screaming like a stuck pig because they are sitting on $1 trillion in Fannie Mae and Freddie Mac bonds and treasuries. What does that mean for gold and for the dollar?
Here's what to consider. Let's say a nice couple in Miami with an income of $100,000 bought a $600,000 home two years ago with a $500,000 mortgage guaranteed by Freddie Mac. Those are all perfectly reasonable numbers.
The husband lost his job and now they can't keep up with the mortgage payments and are in foreclosure. The house is now worth $400,000. The government steps in to help. But who do they help and how? The couple really couldn't afford a $500,000 mortgage on an income of $100,000 in the first place and the husband is now collecting unemployment. How can the government help them? It can't.
The house is now worth only $400,000 with a loan against it of $500,000. How can the government help?
Answer: they can't. The government should let the homeowner lose the house they can't afford and the bank lose the money they shouldn't have loaned.
But the US government doesn't want anyone to feel any pain, much less the Bank of China that loaned us every cent to pay for a useless war in Iraq. So the government is going to bail out Fannie Mac and the Bank of China. At your expense.
The US government isn't collecting enough taxes to pay for all the money they are spending; we are $100 trillion in debt. So they are going to print dollars until they are totally worthless. Fannie Mae and Freddie Mac will pay off their bonds that the Bank of China owns.
In Zimbabwe dollars.
March 17th was the best day this year to be selling gold. Any time now at all would be a great time to place another Anti-dollar bet. Don't think you need to wait. There is something really bad about to happen. I am not sure what it is. But it's going to rocket gold and kill the dollar."
