I sometimes get the feeling that there is huge pressure building up under gold. I have it now ….rather.. as if it will not just shoot through the 1000 resistance but will settle at a new high.
john r. talbot is the author of the book ' the 86 biggest lies on wall st ' that came out earlier this year (jan 2009) . I haven’t read it so I can’t offer a review but he was on the radio here talking about his work and explaining what he views as the biggest problem in the ‘global economic crisis.’ it was the clearest explaination I have heard so far.
it is the derivatives market. Hah!!!! just as I thought! lol.. he says its ‘credit default swaps’. or cds. which in the past few years have become a huge market (like 70 trillion) by which the entire banking system’s with its interconnectedness has been rendered vulnerable.
it goes like this.
junk mortgages were purchaced.. they were in part called sub-prime but were generally just people who could get credit with probably no intention of paying it back..because of a credit bubble…um.. the mortgages were collateralised and sold as debt obligations with AAA ratings that had been fraudulently obtained. from the ratings agencies.
it adds up to trillions of dollars of criminal behaviour. this is the cancer… the cds are the means of transmission.
this has been able to take place through the period of removal or banking regualtions on leverage and other restrictions that were put in place after the last crash in 1929.
accordint to Talbot talking last night.. (03sep09) the insolvent banks are still insolvent. the problem is still very much there.
the 23 trillion dollars that obama has thrown at the system, much of which was supposed to go towards purchasing ‘toxic assets’ ie. the collateralised debt obligations / cds’, have not been put to this use. it's been criminally appropriated.
the 23 trillion dolllars that have been spent or promised in itself is bigger than the entire us. economy by several trillion.
its all kinda surreal.
they used to call them 'cmo s' -- collateralized mortgage obligations-- when i first heard about them in about 1989... they caused a crisis then.
but still rather than regulation of the industry, there has been deregulation and good legislation has been taken off the books.. its almost incredible.
nor has the major problem of corporate lobbyists been delt with by obama according to talbot, which he sees as a primary cause.
in terms of financial/economic correction, we apparently hain’t seen nuffen yet.
talbot wants the criminals to be brought to justice.
apart from a few 'oddballs' ---- it’s one of the sanest thing I heard about the u.s. economy in years.
high time the yanks took a good look at themselves.
my guess is it will take quite a few years for this to even start to sort itself out--- probably from the bottom up..
tejas fu
Posts
