Tuesday, September 16, 2008

AIG: The destruction of the American financial system?

This is what I've been talking about for the last 2 years boyz and girlz. The potential last straws, the triggers that could bring the American empire to a thundering halt. Lehman and Merrill Lynch were certainly on many peoples watch list and it was no surprise that they both met their demise in such a manner.

I'm glad however that Merrill at least made an effort to save something for the stock holders rather than follow Lehman Brothers in a Wall street suicide Pact.

The Lehman collapse was so much different than Bear Stearns debacle, Lehman Brothers was apparently ruled "not to big to fail" so while the government types tried to broker them a life line they personally refused to step up to the plate, perhaps the first good decision this dolts have made in 5 years.
It seems Lehman was chosen as an example, a line in the sand to warn other not to expect the largess Stearns received. Unfortunatley, this line in the sand was so small and ethereal that the Fed tripped over it today not 48 hours later. Bwahahaha!

In the mere course of 2 days we found out AIG was in trouble(no surprise), that Poulson said "no more bailouts", that AIG hired a bankruptcy lawyer and suddenly the blink, The Fed backs down offering a 85 Billion dollar loan to AIG in return for a major equity stake in AIG.

So is the end today? no! probably not! But this does support my belief that we are just one serious event, one black swan away from the financial Abyss, and the U.S. government for all its lying bluster by Bush, Bernanke, Paulson, and McCain knows this and you should realize this too.

An AIG failure would have been big enough to cause massive damage which if uncontained could unravel the entire market. I have no doubt tha containment would have been impossible, and by their actions the Fed agrees with me.

The Fed has just admitted they will blink, lie, bail and privatize what ever it takes to hold things together just a little while longer, probably at least until the end of the election cycle; but be warned, if they continue this sham beyond that time frame monetization of debt, dollar destruction and hyperinflation are the likely result. A particulary sad fact is neither of this year's Presidential candidates has the balls to do what needs to be done and default or hyperinflation will eventually prevail no matter who wins. RON PAUL , where are you ???? I am in fact NOT a libertarian but I do believe he's the only person in Washington who even has an idea where to start with this mess.

I know metals have been brutalized (despite the growing retail shortages) but this is not time to panic, we've made the right choice in purchasing real money, a physical asset that governments cannot counterfeit. HOLD ON A LITTLE LONGER and we will be vindicated.

Canadian exposure to these toxins are starting to be reported, here, here

Nouriel Roubini's view of developments

1 comment:

CHR said...

Things are a mess and will get worse, especially after the US election.

With major companies in the US in default or bankrupt, large amounts of paper equity has disappeared .. forever.

Americans have been gorging themselves on all available credit without the slightest thought as to payback; they'd burn the candle at three ends, if they could!

Their current government has sold out their country from underneath them. Endlessly printing money to pay for The Oil War blamed on the 'terrorists' and the associated new doctrines in the Homeland; then systematically removing their citizen's ability to undo these changes.

Like that movie title _Gone in 60 Seconds_ ... security, liberty & freedom.


I agree with the Ron Paul sentiments.

Metals have been brutalized .. this might spank the fingers of many paper silver holders. The speculators are playing with such deep stakes. Deep stakes = big losers.

Sure hope you can find silver-in-hand to buy at prices this low!