Saturday, November 08, 2008

Coming your way

Marc Faber: There are two possibilities. Banks go under and the stakeholders are left with nothing, as is the case with Lehman Brothers, or governments pump money into the financial system so that the incompetent financial clowns in Bahnhofstrasse [Zurich's financial centre] and Wall Street can continue to eat in fancy restaurants.

I am clearly in favour of the first because the consequences of these state interventions are massive budget deficits. To finance these, governments have to acquire money. For that they have to borrow money, which makes state debt and interest payments soar. US economists have come to the conclusion from the trends that there will be a US state bankruptcy.

Swissinfo: Do you share that view?

M.F.: One hundred per cent.



James Higham said...

Not so sure I'm with the first idea. I have money in there, compulsorily deposited.

Old Prof said...

I don't think it helps that the US spent $1 trillion on the B-35 program, and another $3-4 trillion on SDI, which not only doesn't work, it can't possibly work.

Sackerson said...

James: The stakeholders are the shareholders, but your deposit is insured. I'd also fine the (properly identified) miscreants their last 5 years' bonuses.

OP: I'm not au fait with all the codes and acronyms, but another aspect of my master plan would be to pay down 50 - 100% of mortgages direct to the borrowers, and make lending above certain level/criteria utterly unenforceable if not strictly illegal. Supporting the banks who did this to us? Crazy! Bust the insolvent bankers, let solvent banks take over their lending portfolios, and leave the surviving bankers in no doubt about unlimited liability on their part. Now, back to the real world, run by these crooks and their cronies. Grrrr!

expat said...

Agree, but only on condition, as James says, that every last penny/cent/shekel of my deposit was secure (and returnable in full on demand).