Because the Fed is only supposed to provide lending and liquidity to banks. Much of the almost completely unregulated shadow banking system filled with fun things like SIVs which rely on commerical paper (lent out at those skyrocketing libor rates). You can just bet as those babies are going to be setting off Credit Default swap bombs all over the place.
There is also insurers. Indeed, the Fed probably over stepped its legal bounds when it lent to AIG and effectively begged forgiveness for this error by tagging onto that $85 billion loan double digit interest rates (back then it was at LIBOR + 8.5%) – so saying the Fed bailed them out is incorrect, it is more like the Fed told them to liquidate everything over the next year, and still gets 80% of what is left in the unlikely event AIG survives.
In otherwords, theres a lot of stuff the Fed can’t reach. With AIG the situation will probably at worst result in a slap on the wrist, but if they start overstepping their bounds in earnest they will be begging for a Judicial smack down.
go to monex.com and buy some. Ijust made a huge purchase and received physical delivery. go to ebay and purchase numismatic…there are plenty of options
so how do these terms apply to money supply/stock in the context of gas supply & stock?
I see a classic deflationary environment where the “physical” existence of money is/was significantly created and is now being massively destroyed. An inflationary environment encourages people to spend money now b/c it is worth_less tomorrow. In a deflationary environment where the supply and indeed stock of money is being systemically destroyed by loans being defaulted upon on a massive scale, people are incentivized to hold cash and not depreciating assets. This is why Bernake “will throw money out of a helicopter” to keep us out of a deflationary environment. An inflationary environment is favored by neo-economists/politicians b/c it forces people to work through debt and essentially slavery while a deflationary environment rewards savers. gold is going up b/c of the palatable fear. The question I have is can Bernanke and Company print money fast enough and distribute that new money fairly enough to stop this continued depression
Time to ACT— send the following link to every news paper, radio station and television station in your state. . . apparently the politicians didn’t hear you the first time and are trying to pass the Bail Out through the Senate???-
Email a nice little note like: ---------------->
This explains why no one wants a bail out- EVER. And though I don’t buy into the whole video - if ANY part of this is true – God help us. http://www.zeitgeistmovie.com/
let peace begin.
He’s got a team of some of the smartest people in finance working for him, he’s got access to all of the same stats we’re seeing here… so why is he buying equities? Is there something we possibly don’t see? How long can the agents of change be delayed and is there profit to be had in the meantime? Maybe financial doom won’t come for another 5 years and it’s possible that the US gov’t will steer us out of this storm… I certainly don’t see myself as being as smart and well connected as Buffet … just something to keep in mind. Personally, I am trying to educate myself on what signs to look for that will mark change but I also recognize that there are markets I can be involved in, trade, and make money doing it. Panic blinds…
Thank you for your post, and exactly and precisely what I can’t figure out and don’t understand why more people aren’t asking the same question.
Here’s a clue on what he’s really up to, taken from his 2007 annual report,
"Despite our country’s many imperfections and unrelenting problems of one sort or another, America’s rule of law, market responsive economic system, and belief in meritocracy are almost certain to produce ever-growing wealth for its citizens".
Exactly.
He’s wrong.
Economically of course he’s been more correct than just about anyone, but as he approaches his last days I believe his real driver is nationalistic in nature, ie, he has a quasi-religious commitment to having the US win, even if it means buying up garbage in the hope that foreign investors won’t be scared off.
Do not expect that the US Congress/Senate will let any facts get in the way.
While the above movie has a fair amount of drama, with some unsubstantiated historical claims, (primarily in the "non-economic" sections), it DOES serve to open the door to some economic history on which people are rarely taught in the US Educational system.
You might want to also watch these, all of which are freely available on Google Videos:
"The Money Masters (How International Bankers Gained Control of America)" - a long movie, but full of history, albiet with some conjecture:
While important to keep an open mind and remain logical against unfounded "conspiracy" claims, it is nonetheless, unlikely that one can view current economic events the same after watching all of the above.
I see the problem as understanding how market forces are interacting. I’ll give it a try: Housing defaults are putting enormous deflationary pressure on everything. That would account for why commodities are down and the dollar is up. Europe is starting to implode, driving the market out of the Euro and into the dollar. Massive hedge fund because of exiting depositers, bad investments and need for cash. Paulson’t Plunge Protection team fighting a losing battle trying to keep the stock market propped up. All this masks the bank manipulation going on in the gold and silver markets. I’m guessing that at some point the deflationary forces wll lose momentum as hyperinflationary forces get stronger --between one to two years from now? Of one thing I am sure. The dollar and the Euro will not survive.
Another attack as the supplier shelves around the world are bare. Gold as well sinking as fast as the US dollar is rising. But hey whats not to like? Jobless claims come in at almost 500,000. Now thats dollar friendly! Paper metals "markets" have become the joke of the planet as the COMEX is seeing traders take their chips off the table with no intentions of returning. Government sanctioned fixed markets will do that.
Looks like they are trying to kill the last place to hide. This kind of boneheaded manipulation will only encourage black markets as paper prices and what one must pay for the real stuff go in opposite directions
Spot silver off 72 cents now gold 18.00. What disconnect. What crime.
As expected the shocking jobless claims numbers have lit yet another fuse under the dollar. Stock futures also getting a bid as unemployment is good for the economy. As soon as the US metal paper exchange the CONex opened for business at 0830, gold and silver got killed. You can set your watch by it
Price discovery in all things gold and silver during US hours of business is dead in the water.
Will the day come when the CONex claims silver is worth 1.00 and gold 100.00 but nothing is available around the world
I’m exaggerating but the situation has gone beyond ludicrous.
We are all going to have to get use to the new USSA
Dollar going absolutely ballistic in full blown melt up mode.