posted on Oct, 26 2008 @ 04:16 PM
reply to post by MOFreemason
Trillions of dollars could be erased from the global economy as they do this, and reposition their cash into commodities like gold. The ultimate
effect, the U.S. dollar continues to plummet.
Mostly Tbills, bonds, etc.. perhaps metals, but mostly various different fixed rate return vehicles..
Metals, like Commodities, are volatile.. and I don't think hedge funds will make that mistake again as oil collapsed.
Would China demand immediate payback of our trillion dollar debt, since there is little confidence we could EVER pay them back?
They cannot "demand" repayment.. they can only get payment upon Maturity, just like any other investor. Most debt purchases are 1-3 year notes, or
10 year notes, and can only be redeemed once they mature..
Russia is having a problem right now that they cannot secure short term debt payments, and could possibly lapse long term notes..
America is beginning to see the same problems.
Would their be a run on the banks in the next week or two, as this happens?
Could.. the stock collapse if the funds pull out won't effect bank stocks much .. they are already so low that if they went to 0 the market would
drop only a fraction. A complete sell off imo would spark a further run of 401k and mutual funds.. I don't think you can have Hedge Funds failing
without seeing more and more of the other funds fail..
Will the stock market drop to 2,000-4,000 as some have predicted?
Stock Market and DOW are two different things. DOW only represent 30 companies. If hedge funds begin failing, you will see the DOW and S&P fall
significantly.. I doubt the DOW will reach 2,000 .. but you never know. You can only hypothesize
Personally, I would get the hell out of the markets if your a common investor/401k/mutual funds.. typical "little guy" investments. Hedge funds are
for the wealthy, and if they are packing up and getting the hell outa here, I think we should follow suit.
That's just my opinion though. To move funds into some form of fixed rate vehicle.