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http://www.cnbc.com/id/26656750

ailouts Will Push US into Depression: Manager
Topics:Inflation | Economy (Global) | Economy (U.S.) | China | Gold & Precious Metals | Federal Reserve | Credit | Debt | Mortgages | Politics & Government | U.S. Dollar | Currencies | Investment Strategy | Stock Market | North America
Sectors:Financial Services | Banks
Companies:Fannie Mae | Freddie Mac
By CNBC.com | 11 Sep 2008 | 09:11 AM ET
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The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.

"We expect a depression in the United States. We expect a depression, very possibly, also in Europe," Hennecke said on "Worldwide Exchange."

The estimated $300 billion cost of the Fannie/Freddie bailout will probably be considered as a loss that the government will have to take, therefore passing it on to taxpayers, he explained.

"We already have $3 trillion of debt, as far as the U.S. government is concerned. These debt figures across the U.S. economy are rising very sharply."

When the government can no longer pass the United States' "immense debt" on to taxpayers, it will turn to the holders of U.S. dollars, leading to the eventual downfall of the currency, Hennecke said.

"Definitely, it (the dollar) is not a safe place to be invested in, as real inflation is closer to 10 or 11 percent than the actual inflation numbers given by the U.S. government," Hennecke said on "Worldwide Exchange".

RELATED LINKS

Current DateTime: 07:55:53 11 Sep 2008
LinksList Documentid: 26656960

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Investors should avoid exposure to debt and stay away from leveraging on any investment or asset, including property, Hennecke advised, adding that "banks have been too highly leveraged in the past, private households, everybody."

Hennecke's stock allocations are mainly Asian-based, especially in the Chinese market as the country's government has a large amount of cash and the macroeconomics are fundamentally strong.

He also suggested investing in gold, despite the recent fall in price.
© 2008 CNBC.com
 

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Watchin tha world go by
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8,151 Posts
4th qtr will tell if flat or negetive the spiral will speed up and by end of year end will be in sight---

bond prices will be giveaway the higher the yield in govt bonds the worse it is.

Five-year credit-default swap contracts on U.S. government debt increased 3.5 basis points on Sept. 9 to a record 18, up from 6 basis points in April, according to CMA Datavision in London. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country or company fail to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality.

confidence in our govt abiliby to pay off and service debt is falling --- fast and hard
 
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not a nut
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Between the banks defaulting, consumers strapped for cash, unemployment rising,
3 year arms adjusting for 2005 mortgages.

I can see the all the possibilitys of a depression
sort of funny the government still wont admit there is even recession going on
they just play with there numbers some more, and say... we are in a bit of a slump.
 

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Haha
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3,407 Posts
Between the banks defaulting, consumers strapped for cash, unemployment rising,
3 year arms adjusting for 2005 mortgages.

I can see the all the possibilitys of a depression
sort of funny the government still wont admit there is even recession going on
they just play with there numbers some more, and say... we are in a bit of a slump.
People party and sing to the music while the ship is sinking.

-Cade
 
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