As the leaders of the mortgage bubble continue to hit the wall, the importance of repositioning your assets into the “real” economy and out of a “bubble” economy is urgent.
In Frantic Day, Wall Street Banks Teeter
By Andrew Ross Sorkin & Jenny Anderson – New York Times (14 Sep 2008)
ISDA Statement on Lehman Brothers Bankruptcy Trades: Full Text
By Scott Lanman – Bloomberg.com (14 Sep 2008)
Rush Is On to Prevent A.I.G. From Failing
By Gretchen Morgenson & Mary Williams Walsh – New York Times (14 Sep 2008)
A.I.G. Seeks $40 Billion in Fed Aid to Survive
By Andrew Ross Sorkin et al – New York Times (14 Sep 2008)
World Banks Planning $50 Billion Emergency Loan Pool
By Joe Bel Bruno & Martin Crutsinger – Associated Press (14 Sep 2008)
Fed Lowers Standards for Collateral From Primary Dealers
Federal Reserve Board Press Release (14 Sep 2008)
If you are responsible for retirement or family assets and are not prepared, we strongly recommend our new audio seminar, Positioning Your Assets for Growth in Uncertain Times.
This audio seminar represents our best thinking in response to thousands of questions we have gotten from the Solari network over the last five years. It comes complete with transacript and “before” and “after” portfolios to help you understand the forces impacting us now and our options to address them.
It is never too late to take charge of your financial situation. Every action counts. It is never too late to start. I have every confidence that you can do whatever needs to be done. We will continue to do our best to support and help.
Don’t be so quick at discounting the US Market, our Economy and the financial outlook for this country. You may presently be querulous but there is good news coming. We are in the middle of a money war and yesterday the world markets were served a left hook to the jaw. Starting around 1995 countries such as India, China and Russia tied the value of there currency to the value of the US dollar. Out American dollar became the “Gold Standard” for the world. As the dollar increased in value along with our stock market the corresponding currency increased in value as well. What didn’t change for our foreign competitors was the cost to building widgets. As our incomes increased in the US wages stayed the same overseas. As a result, products, from other countries, became cheaper to produce and less expensive to purchase. Then 911 hit our country, we had a new president, the change in command did not go smoothly and then the stock market crashed. But our dollar didn’t! As a result, our net worth dropped like a rock. Here we were fighting for our safety from terrorist and our economic lives. The dollar was overvalued and our companies that form the bedrock for our capitalist nation lost their net worth. Jobs flew overseas, manufacturing went to China, oil production was just coming on-line in Russia and India walked away with our tech jobs. We still made good products but the cost was so high that even our own citizens purchased imports over US made products. Car exports dropped, Computer exports dropped, steel exports increased. Remember when Wal-Mart switched to buying imports? Remember when they had to change the tags in the clothing from “made in the USA”? Our Nation was hurt. We were on the rocks and begged other nations to not tie the value of their currency to ours and to let theirs float in the market. We knew this was the only way to bring our economy back as quickly as we could. They laughed at us. For years we have been fighting to break the Yaun, Rupee and Ruble ties to the dollar. Delegation after delegation made visits and explained what was happening to our nation. They did not care. We were capitalist and the socialist’s were going to beat us at our own game. Guess what? The game ain’t over. While the world slept our Fed continued to pump money into the economy, they cut the cost to borrow, they talked our “Fundamental Economic Strength” up. The dollar kept dropping in value, day after day, month after month, year after year. Programs were developed to make it easier for Americans to buy homes. Our national home ownership average was less than 62% in 1999. By 2007 it was over 70%. The increase was made up of people who should never have bought a home. They were not credit worthy. Home ownership climbed to record levels. This is who are being foreclosed on today! These high risk loans were marketed through federal institutions, that are not FDIC insured, like Fannie Mae and Freddie Mac. Guess who bought them? Remember people bitching about foreigners buying all our treasury bills and debt? Remember when our Democratic politicians made an issue about China owning so much property? Have you noticed they don’t say a thing now? All the money the Chinese, Indian and Russians made during this fabulous time in their country’s went where? That’s right! They bought our DEBT! They invested it here. In low risk mortgage debts. Our money was and is safe. Their leaders were screwing their citizens and amassing a fortune over here. When all those mortgages went bad who was holding the paper? The houses are still here. Can’t very well go home to Moscow with a split-foyer from Jersey. Notice that the banks that have failed were banks that are not insured by FDIC? That’s right! Who do you think was holding the tab for those? Oil has now dropped to $93.00. The tankers are full, the storage tanks are full and refineries can’t handle any more oil. Ships full of oil are sitting at docks around the world but they can’t be emptied because there is no place for the oil to go. The world can’t use all the oil being produced. The price of goods made overseas have double in the last two years. The S&P has dropped 8.7% since January but the Indians are down -34%, the Chinese -60%, the Russians -40% since May and tack another 17% yesterday on that. We have them by the short hairs. Collateral damage which will affect Venezuela and Iran the most. These two fools have based their whole economy on $150 oil, made agreements, signed treaties and shook hands. So, when the dust settles, our homes will have lost some of it’s equity, FDIC insured banks will hold their depositors money for the taking and manufacturing is coming back. Oil will settle to it’s true development value of around $70 a barrel and where will the worlds money flow to? I hope it all comes home.
The beginning of the Course in Miracles says: “Nothing Real can be Threatened. Nothing unreal exists.” I find this a useful perspective to reflect on at times such as these.
Though I have described the hundreds of reasons that an entire society would invest our hard earned savings in things that are unreal, I still deep down inside do not understand why we would do so.
It all comes down to each of us understanding what is real and what is unreal and, if we don’t know that it is real, then we need to not treat it as such.
Yes, I will look for an opportunity to update on gold and silver,
Catherine
Catherine,
Wonderful to hear your wise words on Coast Monday evening! I wisely taped the conversation between you and George because repeating is important in learning. You said to keep an eye on AIG, but did you have any idea THIS STUFF that happened on Thurs. and Friday was coming?
I feel sad. Free market capitalism is dying away, the country I was born and brought up in is quickly melting like an iceberg in the Sahara in summer. I do hope gold/silver-in-possession serves as a backstop. Next time you are on Coast, can you speak briefly on gold/silver, your latest views on them?
Thanks!
AlienC
Hi George,
I understand how you feel. I spend my days focusing on other things as much as possible and I do get therapy once a month. I am no expert at all, but I guess Lehman can go bankrupt, because the Fed is bankrupt since they owe the rest of the world hordes of money and keep borrowing from them.
I find that looking to my own heart and doing a lot of breathing through the heart helps to keep sane.
Yvonne
Just wanted to say thanks and how much i appreciate all the information.
After reading and researching and finding out more than I ever wanted to know… I am grateful for this hopeful site
There is so much I don’t understand…
thanks again
Sebastian
Catherine,
Enjoyed hearing you on Coast the other night and just oedered your CD.
Gold went up today-Is it too late to buy gold?
Thank you, Marianne
I need a psychotherapist.
Why? We are watching the Federal Reserve GUT our economy RIGHT BEFORE OUR EYES and nobody is asking questions. Lehman Brothers co-formed the Fed Reserve in 1913, and are part owners. HOW CAN THEY GO BANKRUPT? Merrill Lynch… what, PEOPLE DIDN’T PAY INTO THEIR PORTFOLIOS? AIG… WHAT? People weren’t paying their high INSURANCE PREMIUMS… and now, WE THE IDIOT TAX PAYERS HAVE TO GUARANTEE THEM A REVOLVING LOAN OF $85-BILLION to keep them solvent? WHAT DID ALL OF THESE BASTARDS DO WITH THE MONEY WE PAID THEM? WHY ARE WE BAILING THEM OUT? WHY ISN’T SOMEONE GOING TO JAIL FOR ALL THE FRAUDULENT BONDS, LOANS and FIDUCIARY ABUSES? NOT TO MENTION THE BROKEN LAWS AND MILLIONS OF DAMAGED LIVES THEY’VE CAUSED????? OUR LEADERS… where are they? We obviously have none. They are gutting our nation and we sit here like morons… sucking our Starbucks coffee.
I need a psychotherapist.