Do you think that Chairman Bernanke is effectively pursuing a martingale strategy to save the banks regardless of what it costs taxpayers?
The Gov't knows what they are doing they are doing whatever they have to because if they don't the US financial system and the US dollar will collapse.
**** Double Down & All IN! **** "The game never ends when your whole world depends on the turn of a friendly card"-- A. Parsons
Evidence points to the contrary. That is, they are indeed doing whatever they have to, but what that 'whatever' is specifically, they have no idea. If you look at the various Fed programs (TALF, MMIFF, etc) and the fiscal stimuli packages, it will become obvious to you that they're playing it completely by ear.
the fed is a private institution held by the banks, i.e. gs, jpm etc. obviously the fed will do whatever it takes to save its owners. undoubtedly the fed is keen on using tax payer money to save the banks effectively transferring wealth from the one onto another. as matter of fact, the whole deal is just about that. one could say is a martingale but with a slight difference. the fed has an unlimited bankroll. thus, they can average down as many times as necessary to come up ahead. that is, in the long run, the banks will come up ahead while tax payers will be left holding the bag for decades. massive currency devaluation is silently ripping off every american as we speak. take note that bernanke is now campaigning against nationalization. why? because it would mean far less control for the elite banking cartel over such important matters such as monetary policy and eventually the end of their reign.
Pretty similar to what you guys are talking about: http://seekingalpha.com/article/110600-doubling-up-on-losses-with-taxpayer-dollars
Ron Paul to FED Chairman Bernanke, "are you effectively pursuing a martingale strategy?" Bernanke back to Ron Paul, "No, I thought I was told we were doing Monte Carlo this month?" :eek:
playing with fire or playinng with derivatives is what got the old banks in trouble, there was no real profits from derivatives the profits were unreal and they were unreal. banking is an old school institution. removal of uptick rule deregulation of derivative markets deregulation of banking. deregulation of telecommunication the rules were there not to restrict free market but to protect against fraud and malpractice by management of the banks. the cost to the country if these insitutitions do fail is greater than any loan that will be repaid. all the gov't is doing is lending money for temporary relief of temporary shortfall of system that loan can either break or make a business.