Comments on: Credit in the US is collapsing http://www.creditwritedowns.com/2008/10/credit-in-us-is-collapsing.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: Brendan http://www.creditwritedowns.com/2008/10/credit-in-us-is-collapsing.html#comment-59752 Brendan Wed, 09 Jun 2010 03:02:00 +0000 http://www.creditwritedowns.com/2008/10/credit-in-the-us-is-collapsing.html#comment-59752 Edward, Has it occurred to anyone that the Fed is attempting to sequester demand with the express intention of creating wage deflation? They would like to see reflation in the stock markets, stable commodities prices overall including oil together with massive wage deflation. It is not politically feasible in the US to impose austerity measures. They see this action is the only method of promoting globally competitive manufacturing and services back to US shores. The problem with this assumption is that China will not unpeg its currency from dollar and the rest of the world as a whole also has a vested interest in a strong dollar or their Treasury assets go up in smoke. As a result, Mr. Geithner continues on his futile rampage of threatening China over its monetary policy and calling on surplus nations to ramp up their domestic demand with the aim of creating wage inflation in these nations. But in the likely event of failure to realize this futile goal, the Fed plans to deflate and dumb down US wages to match that of China. The wage differential with China is 1:8. In other words, it's unlikely there will be wage parity for several generations to come. With a debt to GDP excluding unfunded entitlements close to 100%, the US is way out of time. The game is already up. It's time for Americans to take the lead, wake up and get back to work digging copper from the mines and creating domestic demand just like we preach to other nations. These idiots at the Fed are smoking crack and oxycodone, on the job. B.Graham brendan@usysinc.com Edward,
Has it occurred to anyone that the Fed is attempting to sequester demand with the express intention of creating wage deflation? They would like to see reflation in the stock markets, stable commodities prices overall including oil together with massive wage deflation. It is not politically feasible in the US to impose austerity measures. They see this action is the only method of promoting globally competitive manufacturing and services back to US shores. The problem with this assumption is that China will not unpeg its currency from dollar and the rest of the world as a whole also has a vested interest in a strong dollar or their Treasury assets go up in smoke. As a result, Mr. Geithner continues on his futile rampage of threatening China over its monetary policy and calling on surplus nations to ramp up their domestic demand with the aim of creating wage inflation in these nations. But in the likely event of failure to realize this futile goal, the Fed plans to deflate and dumb down US wages to match that of China. The wage differential with China is 1:8. In other words, it’s unlikely there will be wage parity for several generations to come. With a debt to GDP excluding unfunded entitlements close to 100%, the US is way out of time. The game is already up. It’s time for Americans to take the lead, wake up and get back to work digging copper from the mines and creating domestic demand just like we preach to other nations. These idiots at the Fed are smoking crack and oxycodone, on the job.

B.Graham
brendan@usysinc.com

]]> By: Edward Harrison http://www.creditwritedowns.com/2008/10/credit-in-us-is-collapsing.html#comment-404 Edward Harrison Wed, 08 Oct 2008 00:51:00 +0000 http://www.creditwritedowns.com/2008/10/credit-in-the-us-is-collapsing.html#comment-404 Joe Six Pack is the innocent victim. And I promise to address this debt-for-equity swap idea. As you know, Buiter likes this and it has merit. What do you think of Gordon Brown's latest proposal? No debt for equity but it gets the ob done a lot better than Paulson's plan. Joe Six Pack is the innocent victim. And I promise to address this debt-for-equity swap idea. As you know, Buiter likes this and it has merit. What do you think of Gordon Brown’s latest proposal? No debt for equity but it gets the ob done a lot better than Paulson’s plan.

]]> By: Mark Wadsworth http://www.creditwritedowns.com/2008/10/credit-in-us-is-collapsing.html#comment-403 Mark Wadsworth Tue, 07 Oct 2008 21:18:00 +0000 http://www.creditwritedowns.com/2008/10/credit-in-the-us-is-collapsing.html#comment-403 <i>Why is the treasury going around buying up bad assets at inflated prices</i><br/><br/>Good question.<br/><br/>First of all, banks should make a sensible write down on their mortgage advances. Then shareholders and bondholders should work out how that loss is to be shared between them via debt-for-equity-swaps.<br/><br/>After that, banks will be recapitalised and owned by people who understand the pain of reckless investing and lending.<br/><br/>Joe Six Pack is the innocent victim in all of this. Why is the treasury going around buying up bad assets at inflated prices

Good question.

First of all, banks should make a sensible write down on their mortgage advances. Then shareholders and bondholders should work out how that loss is to be shared between them via debt-for-equity-swaps.

After that, banks will be recapitalised and owned by people who understand the pain of reckless investing and lending.

Joe Six Pack is the innocent victim in all of this.

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