What is the best scenario?

[HarryBosch]

I have friends and relatives who are not in debt and who have lived by a policy of living below their means. My brother-in-law used to say “It’s not about how much money you make but how much you save.”

He will have his house paid off very soon, will collect a pension and has no credit card or car loans debt. I know he and his wife have made far less per year than myself and my wife have over the years.

All he – and others like him – should do is continue to pay his own fixed rate mortgage. He lived conservatively. It would be unfair – outrageous – to ask him and others to pay for other people’s losses.

[Ex-SD]

XBoxBoy & HarryBosch: Good posts. I agree with both of you.

I saw this on several websites today:

“The European Central Bank yesterday warned that interest rates could rise as early as July as it bids to dampen rising inflation across the eurozone.”

Oil also jumped $10.75 today.

If the ECB raises rates, this will put more pressure on the USA to do something to stop the falling dollar.

[Ex-SD]

XBoxBoy & HarryBosch: Good posts. I agree with both of you.

I saw this on several websites today:

“The European Central Bank yesterday warned that interest rates could rise as early as July as it bids to dampen rising inflation across the eurozone.”

Oil also jumped $10.75 today.

If the ECB raises rates, this will put more pressure on the USA to do something to stop the falling dollar.

[Ex-SD]

XBoxBoy & HarryBosch: Good posts. I agree with both of you.

I saw this on several websites today:

“The European Central Bank yesterday warned that interest rates could rise as early as July as it bids to dampen rising inflation across the eurozone.”

Oil also jumped $10.75 today.

If the ECB raises rates, this will put more pressure on the USA to do something to stop the falling dollar.

[Ex-SD]

XBoxBoy & HarryBosch: Good posts. I agree with both of you.

I saw this on several websites today:

“The European Central Bank yesterday warned that interest rates could rise as early as July as it bids to dampen rising inflation across the eurozone.”

Oil also jumped $10.75 today.

If the ECB raises rates, this will put more pressure on the USA to do something to stop the falling dollar.

[Ex-SD]

XBoxBoy & HarryBosch: Good posts. I agree with both of you.

I saw this on several websites today:

“The European Central Bank yesterday warned that interest rates could rise as early as July as it bids to dampen rising inflation across the eurozone.”

Oil also jumped $10.75 today.

If the ECB raises rates, this will put more pressure on the USA to do something to stop the falling dollar.

[kewp]

The money needs to be paid by someone?

Actually it doesn’t. The debt can be destroyed via deflation.

Given that the Fed can’t cut interest rates anymore a deflationary debt spiral seems inevitable at this point.

The only scenario here is that those with savings and/or jobs will have pick of the litter when it comes to cheap assets.

[kewp]

The money needs to be paid by someone?

Actually it doesn’t. The debt can be destroyed via deflation.

Given that the Fed can’t cut interest rates anymore a deflationary debt spiral seems inevitable at this point.

The only scenario here is that those with savings and/or jobs will have pick of the litter when it comes to cheap assets.

[kewp]

The money needs to be paid by someone?

Actually it doesn’t. The debt can be destroyed via deflation.

Given that the Fed can’t cut interest rates anymore a deflationary debt spiral seems inevitable at this point.

The only scenario here is that those with savings and/or jobs will have pick of the litter when it comes to cheap assets.

[kewp]

The money needs to be paid by someone?

Actually it doesn’t. The debt can be destroyed via deflation.

Given that the Fed can’t cut interest rates anymore a deflationary debt spiral seems inevitable at this point.

The only scenario here is that those with savings and/or jobs will have pick of the litter when it comes to cheap assets.

[kewp]

The money needs to be paid by someone?

Actually it doesn’t. The debt can be destroyed via deflation.

Given that the Fed can’t cut interest rates anymore a deflationary debt spiral seems inevitable at this point.

The only scenario here is that those with savings and/or jobs will have pick of the litter when it comes to cheap assets.

[ironman]

To stay on course:

Joe Six-pack borrowed money against his house value and spent it on a nice vacation
His bank sold the loan to Fannie with guarantee
Fannie sold it to the Chinese GOV with guarantee
Joe Six-pack’s house dropped in value and he stops servicing the loan and dumped the house
The Chinese Gov now has a loan that is not performing and sends it back to Fannie
Fannie sends it to the bank
The bank works with other people money and has it own reserve, what does it do?
a) Use its reserve – very unlikely
b) Use people’s deposits – more likely
The latter is guaranteed by the US Gov so it backs the bank liability as promised
Everybody pays Joe Six-pack load

To HarryBosch:
If you multiply the above situation by a million and US Gov goes broke (bankrupt) who so going to guarantee your relative pension or money in the bank?
If there is a depression everybody suffers. If there is super-inflation everybody savings are reduce to 0.
And I totally see myself in the same situation, live bellow my means for a couple of years just to see my savings cut by inflation/falling dollar.

I am saying that in any situation the money wasted by the speculators will have to be paid by the people who were diligent and financially smart.

Ironman

[ironman]

To stay on course:

Joe Six-pack borrowed money against his house value and spent it on a nice vacation
His bank sold the loan to Fannie with guarantee
Fannie sold it to the Chinese GOV with guarantee
Joe Six-pack’s house dropped in value and he stops servicing the loan and dumped the house
The Chinese Gov now has a loan that is not performing and sends it back to Fannie
Fannie sends it to the bank
The bank works with other people money and has it own reserve, what does it do?
a) Use its reserve – very unlikely
b) Use people’s deposits – more likely
The latter is guaranteed by the US Gov so it backs the bank liability as promised
Everybody pays Joe Six-pack load

To HarryBosch:
If you multiply the above situation by a million and US Gov goes broke (bankrupt) who so going to guarantee your relative pension or money in the bank?
If there is a depression everybody suffers. If there is super-inflation everybody savings are reduce to 0.
And I totally see myself in the same situation, live bellow my means for a couple of years just to see my savings cut by inflation/falling dollar.

I am saying that in any situation the money wasted by the speculators will have to be paid by the people who were diligent and financially smart.

Ironman

[ironman]

To stay on course:

Joe Six-pack borrowed money against his house value and spent it on a nice vacation
His bank sold the loan to Fannie with guarantee
Fannie sold it to the Chinese GOV with guarantee
Joe Six-pack’s house dropped in value and he stops servicing the loan and dumped the house
The Chinese Gov now has a loan that is not performing and sends it back to Fannie
Fannie sends it to the bank
The bank works with other people money and has it own reserve, what does it do?
a) Use its reserve – very unlikely
b) Use people’s deposits – more likely
The latter is guaranteed by the US Gov so it backs the bank liability as promised
Everybody pays Joe Six-pack load

To HarryBosch:
If you multiply the above situation by a million and US Gov goes broke (bankrupt) who so going to guarantee your relative pension or money in the bank?
If there is a depression everybody suffers. If there is super-inflation everybody savings are reduce to 0.
And I totally see myself in the same situation, live bellow my means for a couple of years just to see my savings cut by inflation/falling dollar.

I am saying that in any situation the money wasted by the speculators will have to be paid by the people who were diligent and financially smart.

Ironman

[ironman]

To stay on course:

Joe Six-pack borrowed money against his house value and spent it on a nice vacation
His bank sold the loan to Fannie with guarantee
Fannie sold it to the Chinese GOV with guarantee
Joe Six-pack’s house dropped in value and he stops servicing the loan and dumped the house
The Chinese Gov now has a loan that is not performing and sends it back to Fannie
Fannie sends it to the bank
The bank works with other people money and has it own reserve, what does it do?
a) Use its reserve – very unlikely
b) Use people’s deposits – more likely
The latter is guaranteed by the US Gov so it backs the bank liability as promised
Everybody pays Joe Six-pack load

To HarryBosch:
If you multiply the above situation by a million and US Gov goes broke (bankrupt) who so going to guarantee your relative pension or money in the bank?
If there is a depression everybody suffers. If there is super-inflation everybody savings are reduce to 0.
And I totally see myself in the same situation, live bellow my means for a couple of years just to see my savings cut by inflation/falling dollar.

I am saying that in any situation the money wasted by the speculators will have to be paid by the people who were diligent and financially smart.

Ironman

[Author]

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