- You know just as well as I. the federal government is
bk...that's bankrupt. Further, there is no wiggle room for personal debt,
and with each slightest increase in interest rates, it snowballs. This,
of course, is on top of tanking housing...and on top of that Fannie Mae,
Freddie Mac, Citibank, JP Morgan - all of which have multi-trillion derivative
bets on low rates.
- So, it's an absolutely no-win doom-laden economic situation:
raise rates and the economy collapses; keep rates low and it becomes more
apparent with time (even with the never-ending diddling of economic numbers)
that inflation is running at 10%, or more. Look at gas, milk, medical costs.
And they tell America inflation is not a problem!
- Adam Hamilton wrote at the beginning of the year in the
early 1980's when real rates were negative 5+% (short rate - inflation)
gold was 800+. Now, real rates are twice that to the negative--and the
debt picture now towers over what was then.
- There is NO way out. I can't see it coming out any other
way than a depression. The question is, will it solely be a depression,
or one with the added dimension of civil disorder...