Voltron's economics blog. Started in Iraq in 2007 as the "Gamblers Anonymous Support Group" email list.
Sunday, February 28, 2010
Head of IMF Proposes New Reserve Currency
Voltron says: The impending failure of the Euro should prove that monetary union cannot work without fiscal and political union (it's hard enough when you have all three: substitute California and the U.S. for Greece and Europe). So why would they think a global monetary union would work any better. Strange how it comes right on the heels of massive IMF gold sales. So it will be another fiat currency, which will could extend the system for another decade or so, before inevitable collapse.
Note: Does not include Medicare, Medicaid or Social Security.
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Voltron's Current Forecast
Wall Street and the government are about to engage in battle and recriminations in the face of a massive wave of foreclosures. Wall Street will start yanking the leash, causing stock market crashes whenever the status quo is threatened.
The Fed's announcement that they are going to print a Trillion dollars and use it to buy debt is the proverbial "crossing of the Rubicon" The US Dollar is toast. I think the trigger will be some of the smaller holders of Treasurys (Singapore, for example) trying to dump their holdings before China does. This will cause a panic stampede out of Treasurys which will destroy the dollar.
Wells Fargo are liars. They have over 150 Billion in worthless home equity loans and a Trillion dollars in off-balance sheet liabilities.
Do not abuse leverage. The Fed is going to spend limitless amounts of money to pound interest rates and Gold prices into appearing "normal" when in fact they are on the verge of exploding. The tremendous volatility will shake out leveraged players.