OldNavySailor

Wall Street Breakfast: Must-Know News

It's my limited understanding that credit (loans to industry/citizens) will shrink to unsustainable levels for the economy if the Congress doesn't fund the Paulson/Bernanke tag team proposal. Major lenders/investors will go bankrupt and their assets sold off to the private sector. Is this correct so far?

Now, I believe the US treasury will still have the capacity to print inflated fiat dollars, unlike the depression of the '30's which limited the printing due to the gold standard. So inflation will rise, but money will still be available to the rest of the lenders who are not part of the problem. That means regional banks as an example, through their state charters potentially could receive federal treasury loans to offer to industry/citizens.

I am suggesting all is not loss for the world economy due to a credit 'freeze', but only that high profile financial companies will suffer the consequences of their own actions.

I would like to explore this scenario, if only to educated myself as to other options the Congress could consider instead of trusting what the former CEO of Goldman Sachs is saying.