conceptwizard

Can We Insure Against Systemic Risk?

The Government is not big enough to withstand these losses either. They are printing money from air. Putting the whole marketplace at risk again. We are not through this, we are just beginning.
Obama rolled the biggest dice of all, he risked the dollar. He has the rest of the world running scared wanting out of the dollar, and for good reason.
Ben Bernanke told Congress to either reduce entitlements or he cant roll the debt. I dont think he was in the mood for a joke.

So where is the systemtic risk now, we have backstopped the whole Financial System on the hope that the world will Finance the American debt. Which they are not going to do forever. The average term for debt rollover is 48 months now and shortening.

So if the Congress follows through what does that mean for the American people, lower standard of living. That is a huge tradeoff. Our tax revenues are down 30% so I dont think they will meet bugdet reductions without huge massive cuts somewhere. So if anything the budget deficit will increase by trillions.

The risk is still there we have 200 trillion of exposure with 8 trillion real dollars backing it up, that is huge risk. That loses 10% we lost our principle, if its not gone already.

Folks I dont want to whine , but holy crap that is HUGE RISK!

Its not if or maybe...major changes have to be made or we are in for the worst sort of gumbo that will make the last 20 months look like a Hawian vacation.