From an excellent post by Karl Denninger at Market-ticker:
“Michael Bloomberg, one of the few intelligent commentators out there (and a billionaire by his own hand) said exactly the same thing today:
“WASHINGTON (AP) — New York Mayor Michael Bloomberg is warning a ‘next wave’ of financial pain may come when foreign entities stop buying U.S. debt.
The billionaire mayor is speaking to an audience at Georgetown University, telling them it’s not clear who is going to continue buying U.S. debt as financial firms try to cope with a crisis of confidence on Wall Street.”
Mr. Bloomberg sees the same thing I do, but he’s a bit more polite than I am about it.
Then there was S&P which made this quite clear as well:
“The $85 billion bailout of AIG on Tuesday by the U.S. Federal Reserve “has weakened the fiscal profile of the United States,” S&P’s John Chambers told Reuters in an interview.
“Lack of a pro-active stance could have resulted in further financial stress and put pressure on the U.S. triple-A rating,” Chambers said. “There’s no God-given gift of a AAA rating, and the U.S. has to earn it like everyone else.”
Is that clear enough?
Congress MUST ACT RIGHT DAMN NOW.
Congress MUST stop The Fed and Treasury from printing any more money. The institutions that are insolvent must be forced into the open and put through bankruptcy.
We CANNOT wait until the next Congress and the election to stop this nonsense; that’s five months in the future. By then The United States could easily be quite literally broke and forced into a hyperinflationary spiral!
Debt that cannot be paid must be defaulted….”
I don’t believe there’s any way they’re going to stop the Fed eventually destroying what little remains of the dollar. If they stop inflating, they get blamed for the resultant recession, but inflation can always be blamed on ‘greedy businessmen and speculators’. The average American is completely ignorant of economics- especially the Austrian kind. As a wise man has written more than a few times: ‘We’re all freaking doomed!’
Funny thing… this morning I’m sitting on massive profits in long dollar positions especially against the Formerly Great British Pound. Go figure.
Would you buy Yen now?
or Francs if you had dollars?
I am sitting on dollars – too nervous to trade
You probably have already seen this [ http://www.bloomberg.com/apps/news?pid=20601087&sid=aTzTYtlNHSG8&refer=home ] from the LRC blog. One more bullet point for your GS indictment.
I’m long Yen right now against the Pound and against the dollar. I intend to close those positions at the end of the week if they aren’t stopped out before then. I have nice profits locked in on both of them, thank you Congress. The problem with holding Yen for any length of time is the negative carry… you pay interest every minute you’re short a higher yielding currency. With Yen, that’s *all* of them. The BOJ is an even bigger joke than the Fed, as they’ve proven for the last 20 years and longer. Francs… I was short them this morning, and up nicely for awhile, but I got stopped out of that position at around 10 am. (An excellent trade to have been stopped out of as it turns out!)
I’m also still short the Pound against the Dollar in the account. I’ve been in that position since Thursday, so I have 300 points locked in and my stop is almost 2 full pennies higher than the current rate. If you’re too nervous to trade, then don’t. Scared money never wins. Just buy the ultimate currencies, gold and silver, and start trading the fiat currencies against each other with money you feel comfortable risking. Study the works of Van K. Tharp, Ralph Vince, Ryan Jones, and Larry Williams (especially Long-term Secrets to Short-term Trading).
Gotta run. Dinner time! Wow, what a day!