Asia Is About to Give U.S. a Kick in the Fannie:

Asia Is About to Give U.S. a Kick in the Fannie:

www.bloomberg.com

Catastrophic Risk

``If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic,'' Yu Yongding, a former adviser to China's central bank, said last week. ``If it is not the end of the world, it is the end of the current international financial system.''

Even if Fannie and Freddie are bailed out, recent events mark the end of the U.S.'s financing arrangement as we know it. It's a reality for whi

(visit the link for the full news article)

I am by no means an accountant, but this article laid out the implications of the possible future financial troubles very well. Good read if you your like me and didn't know why "Fannie & Freddie" were such a big deal.



www.bloomberg.com
(visit the link for the full news article)

I agree that F&F are a big deal, but they’re just the tip of the economic iceberg. The world economy is about to convulse and spasm, and only the super rich will be left untouched. The aftermath will include global war, a global power shift away from the USA, and most of the middle class returning to a subsistence lifestyle. Hope you’ve prepared.

reply to post by resistor


So what will be any different than today?

or at anyother time this last 1/2 century?

The government will not allow F & F to fail.

That is, unless, they believe the economic collapse is advantageous for what ever reason..

If it does go down, there can be NO DOUBT left, that this administration isnt a facist empire looking to control the States.

You dont sit back ignoring

911, Iraq and then definate economic collapse mistakenly.

Well of course it could all mean massive problems.
But if you look back into history we have always had massive problems.
And overcome them.
No doubt they have some sinister plan to indeed destroy the current international financial system.
And create another.
Because it can never really work long term.It never could.
Of course all to the elite's selfish gain in it.

The worse part is that america is borrowing hundreds of billions to stay afloat. Who will continue to loan under these circumstances? If the TIC goes negative for 3 three straight months you can kiss the Dollar goodbye.

If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately...

Translation: If the US government doesn't rob its citizens, many of whom chose specifically not to invest in banks with bad lending practices, and give our hard earned money to those who did invest in irresponsible banks...

So while Fannie and Freddie may be "too geopolitical to fail", you and I get to pay for it. Instead of taking risks with their own money, our government feels investors looking to strike it rich during an economic boom should be gambling with American taxpayer money.

...Communists.

[edit on 2008/8/26 by evilod]

Originally posted by Agit8dChop
The government will not allow F & F to fail.

That is, unless, they believe the economic collapse is advantageous for what ever reason..

If it does go down, there can be NO DOUBT left, that this administration isnt a facist empire looking to control the States.

You dont sit back ignoring

911, Iraq and then definate economic collapse mistakenly.

Actually letting them fail is more like Laissez-faire, which is far far far from Fascism which you spelled incorrectly.

Originally posted by resistor
I agree that F&F are a big deal, but they’re just the tip of the economic iceberg. The world economy is about to convulse and spasm, and only the super rich will be left untouched. The aftermath will include global war, a global power shift away from the USA, and most of the middle class returning to a subsistence lifestyle. Hope you’ve prepared.

As much as everyone on this forum seems to want this to happen...it's not going to. There is no economic evidence of this...and most of our debt is held by the EU and Japan...not China

[edit on 26-8-2008 by yellowcard]

I vaguely remember something about Japan being economically superior to the US back in the 70s and 80s. Then we had an economic hickup like the current one. And that was the end of Japan's superiority.

I think there is a recurring theme at work here. If this were a stock, they would call this the pump and dump. You jackup the price, dump your holdings and watch the other guy take the loss.

Somehow I think we recover and China bites the bullet in this game!

There is a whole lot not to like about what is going on. But there is one constant in the universe. All games favor of the house, if you win, it's because they want you to win to pull in the crowd.

I't the golden rule in operation. Those with the gold make the rules.
Those who make the rules, get the gold.

US is sold out to China , as China already bought more than 1000 trillions of the US debt . China cannot work for free anymore.. I agree. Also , there is already a worldwide currency - it is energy - petrol , renewable , atomic - you name it !

Another question for those who follow this closely. When you say the government won't let them go down, wouldn't they have to bail them out which is just as bad. Or do they fudge the process so it's not technically a bail out?

Trying to understand how they can save them from going under without it being just as bad as a bail out.

Thanks for the insight on the topic, we hear about these companies and bailouts and it's nice to get some business to english translations. Thanks guys\gals.

if the freddie & fannie GSE are feared to collapse (at least the common stock) that only means that only a percentage of the $200+ Billion they both need will have to be raised...
i don't know if China, Japan & others have Perferred stock or mostly bonds in freddie & fannie... If they held all their F&F holdings in 'common-stock' --well that's their bad--

both those Asian nation hold a lot of their wealth in Treasuries , most likely two year 'ladder' holdings with a limit of the 10 year Treasuries.
So they might take a drain on their paper holdings.... but they sure aren't going to get decimated if F&F get Nationalized.


the world markets sure don't have an economic collapse in their economic models for the near future USA...
as the USDollar is still gaining strength, the Euro & most other currencies are geting beaten up lately...
as China, EU slowdowns are expected versus the USA rosy picture
of mild growth. (just listen to the eternal Bulls on TV)

The way I read this is China is not going to jump as easy to lend the US money. In the end this is a good thing because it will make the government think twice about all of the money its spending on CRAP! But all this money will have to come from somewhere so guess whos gonna pay. The taxpayer. I hope you people are ready for 50% taxing because its coming and sadly we need it because people have sat back and let the government spend and spend to long without people waking up. Its either that or we drop the FED and tell all the banks around the world we borrowed from to screw off and let the government issue currency. The lather would be MY choice but Im a realist and know this will not happen.

Originally posted by Anonymous ATS
US is sold out to China , as China already bought more than 1000 trillions of the US debt . China cannot work for free anymore.. I agree. Also , there is already a worldwide currency - it is energy - petrol , renewable , atomic - you name it !

Really 1000 trillions? That's more money than the GDP of the entire world...anyhow. America was also being "sold out to Japan" in the late 80s. History repeats itself once again. Of course China has inflation about 3 times more than ours and they subsidize. They have big problems in the rest of the world it's not just the U.S.

Originally posted by yellowcard

Originally posted by Anonymous ATS
US is sold out to China , as China already bought more than 1000 trillions of the US debt . China cannot work for free anymore.. I agree. Also , there is already a worldwide currency - it is energy - petrol , renewable , atomic - you name it !

Really 1000 trillions? That's more money than the GDP of the entire world...anyhow. America was also being "sold out to Japan" in the late 80s. History repeats itself once again. Of course China has inflation about 3 times more than ours and they subsidize. They have big problems in the rest of the world it's not just the U.S.

Correct actually China is #3 on the list of people we owe with Japan being #1 and UK being #2. The oil countries being #4. 1000 trillion does not even exist anonymous you may want to check your numbers again. Yellow you are right China has some issues of their own and without the US having the ability to consume its way out of problems they better start coming up with a plan B

Both China and Japan need the U.S. to buy their products, because neither their domestic markets nor other intertnational markets are capable of sustaining their economic output. The same is true of Europe, and essentiallly the rest of the world.

People think the super rich will survive if their is an world wide economic collapse, which is what we are talking about, but that is not true, the wealthiest lose the most in these economic collapses.

The irony is that we are more productive than ever. The worlds work force produces more per hour worked than we ever have in the past. Everyone contributing their fair share should all be living economically sound lives, we should be working less and spending more time with our families enjoying our lives.

Personally, I think the collapse of the housing market would be the best thing that could happen. Houses are overpriced. Far too big of a share of personal incomes are going to the banks. This was all created by the way the republican congress changed banking regulations back in the nineties, eliminating the check and balances that prevented these types of boom bust investment cycles.

Of course it is all occuring just as the boomer prepare for retirement.

The super rich will only survive if they can afford to pay mercenaries to guard them loyally 24 hours a day. After all, a starving poor man who is desparate will chance a great deal to get what he wants ... especially when it's in a big rich house.

reply to post by poet1b


China is now the biggest consumer of Japanese goods and the EU is the biggest trading partner of China now. Africa and the Middle East have significant demand for Chinese goods too. Also, the Russian's have a significant a holding in Fannie and Freddie too - that's why I am shocked to see America sending warships to Georgia.

We'll have a powerful World Bank and UN administration in a few years. The very notion of small and medium banks will not exist and the "little guy" will be dead in the water.

[edit on 27-8-2008 by infinite]

Blah blah blah same story, different twist, call me when something actually happens in the financial world. Hate to break it to you, but its not the end of the world.