Thinker771

What Happened to Demand?

Excellent and accurate analysis.
Governments wants to get back to credit-based economies.
It may happen, but at the cost of a trillonary bill on bailouts, that will be paid by a huge devaluation of the dollar and other currencies.

The $700 Billion Disconnect: Lost in Translation

Your reasoning is good, and it is a good defence of the bailout, pardon me, rescue program.

Problem is that you are replacing free market (which have spoken and said that derivatives worth nothing), by a directed economy.

Who will decide what to buy and what not? Hank? Someone appointed by him?

Who will decide the fair value that the Gov will pay for this derivatives?

Who will decide which financial institution fails and which survives?

It is not surprising that Hank has asked for legal immunity. He wants to act quickly and fast. Maybe he will make mistakes, and he don't want to be sued by the losers.

But this will not be the free market. It will be someone in the Gov making decisions instead. Soviets tried that and didn't work.

I like more the plan to build a specialized market for this derivates, with strong regulation that forces to disclose exactly the inners of each paper, in specific and short periods of time. Transparency. Disclose. Then the market participants will decide which to buy and which don't. As a result, some irresponsible banks will fail some others will make a profit. That is free market. That is capitalism.