“…if the taxpayer is to profit from the bailout, that just means real estate prices not only have to get back to their previous peak, they have to exceed that peak by the amount of the interest expense that has to be paid to show a profit.
More proof we’re not going to profit.
Third, raising taxes isn’t going to help, either. There’s no way the economy can handle higher tax burdens right now. And even if it could …
Recouping part of the $1.29 trillion (ignoring the interest expense cost) through taxes is not a profit for the taxpayer. It’s a burden. A cost.
So I ask you again, where’s the profit potential for the U.S. taxpayer?
Answer: There will not be any profits. Period.
…the real cost of this bailout will be at least $1.29 trillion. And if real estate prices don’t stabilize soon, the cost could easily mushroom to $1.5 trillion. Or $2 trillion. Perhaps even more. Not counting the interest expense! ..And again, how’s it going to be paid for?
The one and only answer: By a substantial devaluation of the U.S. dollar. By inflating it away. By eventually raising asset prices fictitiously through inflation, through more smoke and mirrors, via an eventual massive dollar devaluation.
In fact, there’s precedent for it: The Great Depression only ended after Roosevelt devalued the U.S. dollar in January 1934 by raising its exchange rate with gold from $20.67 to $35.00.
That was a de facto 69% devaluation of the dollar.
The same thing is going to have to happen this time around. Only you won’t see any President, or anyone in Congress or the Fed actually coming out and saying the dollar needs to be devalued.
They won’t have to. The markets will do it themselves. Notwithstanding an occasional knee-jerk rally in the buck, the dollar is toast. No ifs, ands, or buts about it.
Already, some measures of money supply, the ultimate source of devaluation of a currency and inflation in the economy, show money growth running at an annual rate of more than 14%.
And in the last two weeks, that rate has exploded even higher, to an annualized growth rate of, get this — over 200%!
There is no way that kind of monetary growth can be anything but inflationary.”
…Wonder what they’ll call the new currency?