From Denninger's Market Ticker:***
Let's not mince words here:
The entire finance and real-estate "industry" is filled with massive, pernicious fraud, and we now have only one question remaining - will The Government do its lawful and mandated job, that of prosecuting the bad actors, or has it joined with the fraudsters, become one with them, and thus, declare itself as a gang of mobsters rather than a legitimate government? The latter, of course will beg only the question of what should be an ordinary American's response...
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Read it all, please, then pass it on.
Tempus fugit.
"Key questions remain open and unanswered in regard to MBS issuance under these allegedly-false pretenses, chief among them being (1) whether The Fed and Treasury have monetized these in response to demands from China and other foreign banks who recognized their deficiencies,.."
ReplyDeleteIt may not be clear *why* the Federal Reserve took $2 Trillion in damaged assets onto its balance sheet in exchange for US Treasuries, but those defective securities effectively doubled the Adjusted Monetary Base because the mortgage-backed securities cannot be resold for anything close to their par value.
The resultant deficit will have to be monetized or the banks who sold MBSs to the fed will have to write down those assets at a ~$2 Trillion loss.
If the deficit is monetized, it will produce mass inflation; if the banks mark-to-market these defective loans, it will produce a horrific economic depression.
Social upheaval is the likely result in either case. If you have not already instituted a plan to see you through the coming strife, you had better get busy.
MALTHUS