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Graham Summers has been made fun of many times for being a sensationalist. Some of his statements have been a bit over the top but he makes an excellent point in this article.

Lehman was leveraged 30 to 1 when they had to be bailed out. The Fed is currently at 54 to 1 because of all the toxic assets that they purchased. Who is going to bail them out?

http://gainspainscapital.com/?p=591
 

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It all sounds good on the surface, but without subscribing I have a feeling that his solution is all based on paper values. To me this would indicate you have good looking paper values in degraded paper.

Basically you should have your $100,000 invested short turn into $200,000 or better of devalued FRNs.

What would be the point?
 

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It all sounds good on the surface, but without subscribing I have a feeling that his solution is all based on paper values. To me this would indicate you have good looking paper values in degraded paper.

Basically you should have your $100,000 invested short turn into $200,000 or better of devalued FRNs.

What would be the point?
Would you rather have $200k to buy PMs with or $100k?
 

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The future may be different. Inflation is just beginning to set in. You still have to take out the inflation in FRN s loss of value from his percentage. YMMV but I am currently untrusting of paper backed assets. I am not buying any subscriptions.

BTW silver had that beat solidly about 7-8 weeks ago.
 
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