Monday, November 10, 2008

SIV's rear their ugly head agin in the most unexpected of places

SIV's are blamed by many as the cause of the current economic crisis. With companies placing undesirable assets off their balance sheets they could report profits and other good news whilst hiding the truth. Thus today i was shocked to hear that SIV's have once again reared their ugly head in the most unusual of contexts.....

The US governments financial system has always been propped up by the hot air of the treasury requesting blank checks be filled by the federal reserve (who has no money in essence) and therefore driving inflation. Now with AIG's guidance and assistance the government is creating SIV's to carry AIG's bad debts and high risk credit swaps etc. What does this mean, well essentially they are washing AIG clean and hiding the dirty laundry for the US taxpayer to pick up, if they have any intention of balancing the books at any time.

There are a few extra tidbits for those interested:

1) expect oil to rise in price to around $80 a barrel once the markets are ressurrected, making now a great time to buy.

2) expect gold to continue to rise in value as any collapse in the US dolar and currency markets in general will cause a flight to quality and this is the truest mark of quality.

3) expect to see the US dollar collapse some time in the next 12 months making the Euro the currency of choice

4) expect to see Ford file for bankrupcty in the USA, years of trade union power have created an unviable model and weighted the company down with a health and pension burden it cannot meet.

5) I have been saying it for a while, expect to see GMAC die the death, GM will get bailed out some how i am sure.

6) watch for AMEX to devalue and possible go bankrupt. Creating a bank has allowed them access to fed funds which may save them but remember they are the highest risk of the credit card companies as they make their own loans by owning both sides of the transaction instead of just being middle men.

Copyright Jonathan Rose 2008 - Creative Commons License

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