Agenda I guess keeps the virtual world separated from the real world especially in gambling! Nevertheless I wanted to share a friend of mine's summary of recent events....not meant to be a political statement but a macro-economic statement and imo my friend is spot on....thought you might find it interesting!!
"Yea, I've been following all of this for several weeks now. It takes a long time for this all to unwind, though. The Federal Reserve "printing money out of thin air" is exactly what Ron Paul was always talking about when everyone thought he was crazy. Now maybe everyone will see that he isn't, even though no one ever sees him on TV news.
Every time the Federal Reserve bank develops some new way of getting money to the Banks at discounted rates (First the anonymous Term Auction Facilities, now this $200 B 28 day loan window), they decrease the value of your savings account and of the dollar. That's the "inflation tax" that people talk about. [Btw, Elliot Spitzer was fighting this sort of bail-out behavior on Wall Street, but was just forced to resign right before this whole bail-out happened]
AND:
Today, Bear Stearns, the huge U.S. Investment bank started back in 1923, failed. It went bankrupt. The Federal Reserve gave it more money through J.P. Morgan (another bank, since they couldn't loan directly) to keep it alive. Banks in Europe have been failing for several weeks now, but the U.S. News seems to not report much of it. The multi-billion dollar hedge funds are liquidating, too. What has happened is "leverage" which is when you take out a loan at 5% interest to buy something that yields 9% interest... you make the difference in profit, or 4%. The hedge funds did this several times over, sometimes 30 times, making millions or billions of dollars!!! The problem is: if the original money goes bad, everything that was purchased by that money on leverage, also goes bad, so it "unwinds" very quickly, and even on relatively small margin calls. If something is "leveraged up" 5 times, then a failure of just 20% of the value erases it all.
I think this is set to be worse than the "stagflation" of the 70s, and the Savings & Loan crisis and LTCM and dotcom collapse. About 500 Trillion dollars in these credit and debt securities that are no longer selling and causing the "credit crunch" are out there in the world. The world's GDP is only about 65 Trillion dollars, which means there's far more money to be lost than there is total wealth and production on the entire planet. There's also a recession happening during the credit crunch.
There are a lot of very big problems, but what will probably end up happening is this: the Fed will continue to buy up all of this very bad debt in the markets, which will continue to push up inflation drastically. Otherwise, the economy could collapse on itself.
There's not much that any of us can do except make sure that all debts are paid ASAP and that you save as much as possible. "Live within our means, or live beneath your means"..."
"Yea, I've been following all of this for several weeks now. It takes a long time for this all to unwind, though. The Federal Reserve "printing money out of thin air" is exactly what Ron Paul was always talking about when everyone thought he was crazy. Now maybe everyone will see that he isn't, even though no one ever sees him on TV news.
Every time the Federal Reserve bank develops some new way of getting money to the Banks at discounted rates (First the anonymous Term Auction Facilities, now this $200 B 28 day loan window), they decrease the value of your savings account and of the dollar. That's the "inflation tax" that people talk about. [Btw, Elliot Spitzer was fighting this sort of bail-out behavior on Wall Street, but was just forced to resign right before this whole bail-out happened]
AND:
Today, Bear Stearns, the huge U.S. Investment bank started back in 1923, failed. It went bankrupt. The Federal Reserve gave it more money through J.P. Morgan (another bank, since they couldn't loan directly) to keep it alive. Banks in Europe have been failing for several weeks now, but the U.S. News seems to not report much of it. The multi-billion dollar hedge funds are liquidating, too. What has happened is "leverage" which is when you take out a loan at 5% interest to buy something that yields 9% interest... you make the difference in profit, or 4%. The hedge funds did this several times over, sometimes 30 times, making millions or billions of dollars!!! The problem is: if the original money goes bad, everything that was purchased by that money on leverage, also goes bad, so it "unwinds" very quickly, and even on relatively small margin calls. If something is "leveraged up" 5 times, then a failure of just 20% of the value erases it all.
I think this is set to be worse than the "stagflation" of the 70s, and the Savings & Loan crisis and LTCM and dotcom collapse. About 500 Trillion dollars in these credit and debt securities that are no longer selling and causing the "credit crunch" are out there in the world. The world's GDP is only about 65 Trillion dollars, which means there's far more money to be lost than there is total wealth and production on the entire planet. There's also a recession happening during the credit crunch.
There are a lot of very big problems, but what will probably end up happening is this: the Fed will continue to buy up all of this very bad debt in the markets, which will continue to push up inflation drastically. Otherwise, the economy could collapse on itself.
There's not much that any of us can do except make sure that all debts are paid ASAP and that you save as much as possible. "Live within our means, or live beneath your means"..."