Analyst predicts Prime mortgage and U.S banking 'Breakdown' in 08

St Udio i do appreciate the links

going back several years thru jim's archives one can see that he is a bit flamboyant with his writing but it may be because he knew the type of trouble we are in for down the road (which is what he stated in his old posts which are very informative)

although since he writes for a gold website he may have a bias to interpret things more toward gold's liking ( but that is just weak speculation) on my part.

One thing that i get is that should China decide to allow it's curreny to strengthen (which the idiots/ or as&holes in congress) were begging for would lead to rapidly inflating prices in consumer prices in america.

It seems damn near the whole world is in some type of configuration where u.s consumers were put on a pedestal where we can live above our means and be supported by credit which helps create the export demand for china and japan where the yen and yuan are supressed to keep their exports and trade surpluses in tact and our prices low and deficits bulging.

the problem seems to come in to play when our consumers stop buying their crap, it would seem the path of least resistance for them to take would be to develop more agressive relationships with emerging markets such as india and possibly arab country's where possibly they could keep there game going just w/ different customers. (so the effect for american's would be modestly rising prices) but nothing "hyperinflationary". this may include selling some of our debt and us depending on Gulf nations or secret gov't actions to purchase are debt or watch our intrest rates rise rapidly domestically.

this decline in our dollar (accelerated if the European Central bank does not cut rates) would allow moderate price inflation to become more apparent and energy would probably begin to level off although gas prices tend to surge during summer, and a iran conflict would prob = oil shock.

it appears that libor rates have begun to level off and since these are tied to long term mortgage rates, perhaps people would benefit from refinancing (thus allowing them to continue to live with some sort of piece of mind.

the biggest threat i see for the regular economy is unemployment and reduced consumer spending leading (in part thanks to lowering home values) spiraling out of control.

as far as the financial economy is concerned i think banks will have pro-longed pain and be begging for SWFund injections as foreigners gain more control of american corporations. If the credit markets stabalize i think gold will have a bit of a sell off, but i really don't understand all the intrecacy's of the credit markets well enough to predict anything with a high degree of confidence coupled w/ the fact gov't rescue programs and tax cuts or raises will play a part. if i was betting i would say the financial sector may have temporary spurts of normalcy (like we did last year from late september to mid novemeber) but then get worse for awhile (sort of like a roller coaster).

This continues to be a topic of most intrest to me as far as the world is concerned just slightly more so than the new book "seeds of destruction" that i am reading.


[edit on 14-1-2008 by cpdaman]

www.gold-eagle.com...

intresting take on the great depression and how the bond speculators thrive when they know a fiscal stimuls is coming

also that big banks profit from deflations thru bond speculation to help them re-capitalize, and that fed efforts to "reflate commodity,stock prices" fail as hot money will flow into bond markets, as stealth recapitilzation.


[edit on 2-2-2008 by cpdaman]

2nd Jim Willie audio-interview

"Controversial, yet indisputably accurate, Jim Willie's take on what has happened, and what is on the way..."

Michele and Jim Willie discuss the Bear Stearns crisis and how the dominoes are lined up for an endless series of economic shocks. - Contrary Investors Cafe. Link

No sugar-coating. Also some important insight regarding the popular PM ETF's.








www.contraryinvestorscafe.com...

As an odd side note to the mortgage crisis topic; if you notice more dogs and cats (especially friendly ones that are not afraid to approach humans) around your home, it's a strong indicator of rising foreclosures in your neighborhood. That's a damn shame. If the housing crisis/economic downturn continues for the long-term, that will change from animals to humans - and for the sake of every child I hope to God it doesn't.