http://www.motherjones.com/washington_dispatch/2008/10/credit-rating-agencies-we-sold-our-soul-to-the-devil.html "Internal documents show that while rating firms publicly defended their practices, executives privately wondered when the house of cards would fall." "For years, credit rating agencies—the referees of Wall Street—insisted they were an impartial source of information, despite their financial reliance on the companies they rated. Then came the market meltdown—and a chorus of accusations that firms had artificially inflated their risk ratings to please their clients and gain a competitive edge. And now there’s plenty of evidence to suggest the "referees" were unduly influenced by the players.'
The rest of the article contains other models of rating companies, claims that there was no way they could have foreseen this
And of course Rep. S. Lynch (D-Mass.) got his emphasis whining about the defrauding of his people. He had no complaints about Phil Gramm and the Congress that allowed this to happen and continue to happen. (repealing the Glass-Segal Act and passing the CFTC act http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.htm )
[quote=gregroberts]Interesting article about the G20 meeting this weekend… http://www.moneyandmarkets.com/the-g-20s-secret-debt-solution-27996
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I’ve read this article yesterday. I may got it wrong but IMO it’s irrealistic because diluting the debtors would equally dilute the creditors. The Chinese, Arabic, Russians and other creditors will never accept to loose almost all their savings (T-bonds…)
Do not expect too much from the coming G20. Everyone will try to save its own interests. Also I doubt Bush & Co would take big decisions in place of Ob.
Big shocks might come from China & Russia. They already agree to ditch $ in their trade. No doubt they would love to see everyone ditching $. Russia gave clear signals the day after Ob election by deploying missiles in Kaliningrad which means "remember we still have nuclear missiles". China & Russia also hate, really hate, beeing "dictated" by others: US as well as Europe.
Just this week I noticed a sudden rash of Citibank ads on payTV (Australia) offering gold and silver credit cards at an interest rate of just over 2%, specifically marketed for paying off other credit cards. Knowing that they’ve already bought a lot of bad debts and were looking like going under, I couldn’t help but wonder WTF they are up to.
IMHO if Bush is doing anything at G20, it’s probably ensuring his own personal interests and those of his mates, paying back favours and such. His efforts in this regard have never turned out well for the average person so I just hope he’s unable to achieve anything.
Have you any idea what the conversion rate would be from US $ to whatever the new currency would be for the US?
When monetizing the national debt begins and with interest rates probably high I think it would be best to have very few US$. Chris always says to pay down our debt. I still have to pay off the remainder of my house. I have the cash to do it but have never wanted to because of the income tax deduction that I receive. I guess my question is would I be further ahead financially to pay off my house with (what will probably be inflated US dollars in the future) or to wait and pay if off with the new currency? What are the pros and cons? Thx!
You are playing a very dangerous game. You assume that the coming inflationary period will be like the inflation of the 70’s. It won’t. In the 70’s general prices, asset prices and wages kept chasing each other upward in an ever increasing spiral. In the coming inflation (co-existing with deflation) prices of necessities will indeed increase but wages and asset prices of non-essentials will fall or remain stagnant. The answer to your question is that you should pay down your debt. You will not get a better return than investing in your own mortgage since when you think of it this is really a risk free investment.
