Saturday, March 06, 2010

Peter Schiff: Jobs, consumer credit, Fannie & Freddie

The Duke talks about the 'good news' about how US unemployment climbed less quickly this week than everyone was expecting!
Can you imagine a Weight Watchers meeting ran on a similar basis:

Facilitator:"So Fat Bloke, how did you do last week?"
Fat Bloke:"It was a great week. I was expecting to put on 5lbs but I only put on 3lbs!"
Facilitator:"Brilliant, Fat Bloke. Well done!"
Mr Schiff then discusses Fannie and Freddie government-guaranteed debt, and how everyone in America is now being made to guarantee everyone else's mortgages, even though they wouldn't like to guarantee their own neighbour's mortgage or even their own relatives' mortgages.

He predicts that if Fannie and Freddie debt (around $3 trillion dollars) is added directly to US government debt (around $12 trillion dollars), then this takes a combined figure to $15 trillion, which is more than 100% of US GDP. This means that once the bond market vigilantes have stopped messing around with Greece and the UK, then they will be heading across the Atlantic to the US bond market.

1 comment:

Firoz said...

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http://www.globelend.com/consumer-credit/