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First we have from Bloomberg:

Then we have:

As the bondholders want the Treasury to bail them out at Taxpayer expense.  Nothing ever changes with Republicans.  "We the people" are here to be raped.

Now I want you people who responded to my previous diary by illustrating that you have no clue whatsoever as to how the current money system works or what inflation might be and how it might affect the various economic classes, to tell us how all our butts will fall off if the Fed "rescues" Fannie and Freddie with Pixie Dust.

Pixie Dust is called "NEW money".  It is created by governments (or central banks) and spent into existence to purchase, perhaps, a battleship.  The Treasury and the FED THEN worry over whether this injection of money will cause...    wait for it....  INFLATION (Martha, Hide the Kids).

It looks like you people had better wake up and at least make a half-fast attempt at understanding the BASIC concepts of fiat money.  Because if you don't you are going to get screwed again.  The lying pig Congress will insist on "appropriating" the money to rescue the bond holders who are holding the Freddie and Fannie bag.  And "appropriate" means taxes for you and more money for the rich as they "invest" in some more government backed T-Bills EVEN WHILE THE ECONOMY IS IN THE TOILET AND GETTING WORSE.

I want you all to actually THINK about what would happen if the FED were to MONETIZE whatever is needed to "bail out" Fannie and Freddie by just creating  enough Pixie Dust to "float" Fannie and Freddie at current market value.  The suggestion being offered herewith is that the taxpayers need not be on the hook at all.  

If such a creation of Pixie Dust causes INFLATION (which I say it won't), then we can worry about selling some T-Bills to "soak up" the extra money, or we can raise taxes to accomplish that same task.  And if we must pay higher interest rates in order to sell T-Bills then that is reality. This is actually called "reality based monetary economics".  If and when the inflation monster comes, you can pick between taxes on the rich or selling them some very lucrative T-Bills.  The government has, since 1980 been choosing to sell them some nice fat T-Bills regardless of "INFLATION".

Originally posted to TheTrucker on Mon Jun 14, 2010 at 08:40 PM PDT.

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