The $100 trillion question

[Mr. Perfect]

Ehh, check your meds, foreclosure at a profit was not my idea (and I'm amazed you found out about it just now):

http://www.youtube.com/watch?v=_MGT_cSi7Rs" onclick="window.open(this.href);return false;

[Mr. Perfect]

[~]

[Mr. Perfect]

[amos]

[Mr. Perfect]

Why?

If you want to talk about subprime, foreclosure for profit, whatever, please start a new thread.

[amos]

[Mr. Perfect]

Start a thread then. Please remain out of this one.

[jerryberry]

[~]

Isn't mortgage debt a large component of American consumer debt? That and credit cards?

Hey! Isn't credit card debt also repackaged as derivatives and bought by institutional investors?

[Mr. Perfect]

I think the tax on foreign credit is interesting but perhaps too obvious. Seems like there could be lots of backdoors. There are SO many backdoors. Not shooting you down though...

[Mr. Perfect]

[Endovelico]

[Tinker]

amos Please stop making this thread about your personal distaste for Mr. Perfect. Regardless of all of those other things you feel about him, he does ask an interesting question, and it would be nice if we could discuss specific things rather than turning everything into a vague and overly broad hatefest.

[Colonel Sun]

[AzariLoveIran]

.

Mr. Perfect , America, USG, actively solicited , encouraged, inflow of foreign capital .. for decades, biggest American imports foreign capital (and not Oil) .. American presidents, many times, asked on TV, were asked whether they were concerned about this, they said, Bush said, "NO, America is a safe place for foreign money" ..

Basically, the poor world was financing America


Question is why America, USG, wanted foreign money inflow ..


Well ..


This was no accident .. it was calculated ..

Consider this : when foreign Dollars started coming to America, US-Dollar was worth something ..

What does it mean ? ?

It means that a Swiss exchanged,1 Dollar = 3 Swiss Franc, to buy 1 US-Dollar .. lend that Dollar to America .. America took that dollar and bough Swiss assets,
on the cheap .. now, America pays back (to Swiss investor) that borrowed strong Dollar with worthless Dollars (1 Dollar = 0.95 Swiss Franc) ..

Basically America fucked the foreign investors ..

China sent you all those goods and got 1 Trillion Dollars .. those Chinese Dollars have lost 40% of value ..

Well ..

What is the result ?

That is why treasury is selling bonds to FED (China net seller of US bonds) ..

That was the price that China had to pay ..

But, who is really screwed ?

Arabs ..

America was partying and foreigners were paying the bills .. not anymore


Dollar could drop to fifty cent Canadian, probably lower .. like Turkish Lira ..


.

[Mr. Perfect]

Well, sort of all of the above but I guess we would focus more on the debt in non-g areas. An enormous amount of credit entered this country, I'm not sure how much detail we need to break down, but I am more concerned about what types of actions a country could or should take when levels of indebtedness get to these levels. The fact that so much came from overseas is worthy of consideration IMV.

[AzariLoveIran]

[Demon of Undoing]

Interesting view ALI. I will be curious to see if there is that much actual planning and intent. Even though underhanded , such a thing at least is internally consistent. I just doubt they will bring the money back to the US at any point. Don't know why they would other than patriotism ( had to stifle a laugh when I typed that).

[Colonel Sun]

[Tinker]

[YMix]

[AzariLoveIran]

[Mr. Perfect]

I appreciate everybody's... theories.

I don't mean to be an @$$, but a lot of what has been said is a little off the mark. I don't mean this to insult anybody, and I appreciate the interest and contributions.

Eg, we could go on all day about who said what to who, where this came from, etc, but that isn't really what I'm asking for.

What I'm asking for looks like the following;

When a government runs a deficit, with out getting into what the money is being spent on or whatever, what we know is that proscriptions for closing the deficit are either tax increases, spending cuts, or increased growth, or any combination thereof. You may or may not agree with one part or the other, but those are the prevailing policy proscriptions.

Or, if you are a CEO of a company with a really high multiple stock price you would look to issue more shares. Conversely, if your stock is trading too low you would initiate a buyback.

Or, if options are really inflated you look at selling premium, when they are low you would be more inclined to buy options.

Or, if companies are surging after earnings you are more likely to hold over earnings, whereas if companies pull back after earnings you are more inclined to hedge, we could go on all day.

What I'm looking for is some judo maneuver a country could utilize in an event such as this, either from a central planning perspective or otherwise.

So far CS's Malaysia example is the closest to what I'm looking for (I barely remembered that, thanks)

[AzariLoveIran]