The Federal Reserve is now
Atlas.... let's just hope they do not shrug....
During the war of the TITANS, ATLAS stormed Olympus and threatened the Gods. And as punishment for this war crime, ZEUS sentenced him to hold up the heavens and bear their weight on his shoulders forever
I was going to post this story a few days ago when the U.S. Government was ONLY on the hook for $7.7 Trillion but with yesterday's additional $800 Billion, the entry needs to be edited (by the day it seems) The bill now could reach
$8.3+ Trillion. This is staggering folks - just staggering; I don't think people can even wrap their minds about this sort of data. It is our typical American kick the can down the road - we'll worry about the implications of it all once we get out of this current mess - this is the U.S. mode of operation for multiple decades now. I do believe from what I am seeing lately that the Federal Reserve is now of mind of "print at all costs" - the money supply data is simply in "hockey stick" formation and they'll deal with the
ramifications of their actions at a later date. For now, they are going to print like there is no tomorrow. (and let me be clear about the headline - technically the Federal Reserve is not part of the US Government)
This is an entry to print and hand to your friends who think we are "only" giving $700B of TARP money - if they're steaming mad about that, well that is now less than 10% of what we have exposure to. The scary thing? If we marked to market the whole banking system collapses so for all the problems we have morally with this, it might just be NECESSARY to flood the system with this many pesos if we don't want the end of the entire US financial system.
- “If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.” “Mark to market” means adjusting the value of an asset, such as a mortgage-backed security, to reflect current prices.
But the distribution of said grandchildren money could of been a lot fairer to Main Street ...
Effectively the US produces $13 Trillion each year... so we're on the hook for (potentially) over half of a year of every dollar produced in this country. Other incredible statistics
- The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.
Shouldn't we just have done the latter? I mean toxic mortgages are the
nexis of the problem (the largest share) - give everyone with a mortgage a 50% payoff and all these toxic instruments in the system become "paid off" or a much smaller risk.
