These thoughts are scattered and not yet laid out in an organized post:
As I understand it, this bailout relies on outside investors (read: foreign investors) to buy up Treasury Securities, in order to fund our spending. Basically a huge fire sale on T-bonds to anyone who want to invest (anyone being mostly foreign countries, specifically Japan and China who own about 41% of our Treausury Securities).
We are betting/hoping/wishing that foriegn countries will (indirectly) back this plan by scooping up these securities. And if they don’t?
If foreign countries don’t invest in Treasury Securities, the FED will be forced print cash money… which is the worst thing that could happen, as it would deflate the dollar, and cause the inflation of foriegn currency. Basically, our dollar would be worth way less and the Euro and the Yen would be worth way more.
Sorry, but I’m more willing to bet on the market than on government bailout. In my opinion, US would bounce back in less time (I think it would be a rough 1-5 years) but the other option is a rough 10-20 years of struggling, sputtering economy and foreign ownership. Yikes.
Wiki has a good explanation on Foreign Ownership: Here.
No Comments on "my thoughts on the proposed bailout…"
check this: http://www.findingrhythm.com/blog/?p=1092
and note that the neocons use times of crisis to push through massive changes that would normally produce outrage. what all dies in the wake of this change??
that was good.