In short....the debasement of assets signifies that the real issues are going to lie amongst previous debt arrangements....with the focus on the 2004/7 price level adjustments.... What is clear is that debts that were incurred at extremely high prices will have to be adjusted downwards....thus implying losses to the debt providers.... Money flows of a going concern....are the major focus of valuation....upon which debt relies.... .......................................................................... If the prospective money flows to going concerns is compromised by lower sales due to a lack of credit ......then any policies constructed to preserve the older valuations would be like pushing on a string..... Thus those debts which are dependent upon the excessive price valuations must be allowed to lose their value.... The tools used to moderate these losses are 0 interest rates which bring to fore the highest value for going concerns which have debt at higher interest rates.... However one could look at the total of the US as a going concern....and look at the change in cash flows generated ....much as one would value a bond.... What one would know from the onset is that if the maximum values were obtained with full credit availability.....and thus credit availability is slashed by 70%.....then one would expect a commensurate move in the total asset valuation as well..... The next step involves the dilution of money....with the aspirations of the dilution to show up as increasing monetary cash flow to going concerns......however unless this shows up in the form of comparable previous credit availabilities....then its purpose dissipates and causes more disparities..... Productivity is the only capitalistic way to properly add values to going concerns...... The price points are clearly much lower.....especially when over 70% of big ticket durables ....namely housing and cars were dependent upon much higher levels of credit availability.... It should be a reasonable assumption that 2006/7 prices levels will decline to at least prior period levels last seen in the 1980's.... These prices particularly apply to houses and cars..... ............................................................................................... The US is going to $10,000 to $15,000 cars......and $70,000 to $120,000 houses being more the norm..... ............................................................................................. The other reasoning for a Japan type scenario will be that the previous high price holders will be reluctant to show losses....and thus extend the time period of price adjustments.....The economy thus will be in "stall mode" for a very lengthy period of time..... ............................................................................................... Government policies that would promote acceptance of the new lower price levels such that the time of change may be reduced....will just show up as above normal future pricing.....depending on how the cost is financed.....which is probably the reason there was mention of 100 year bonds...... Basically a fast government buy out of underwater debtors financed by 100 year bonds would be the lowest annual cost....or rather the least intefering socialist option....such that the remaining capitalistic portion left will have the least legacy costs.... ............................................................................................ Thus minimizing the time of price adjustments to new credit levels could be done by adsorbing the 2004/7 price losses into a 100 year low interest only loan..... Obviously this would be the most extreme, most favorable position.....which knowingly cannot be attained.... But the idea would be to approach the proposed as close as possible..... That is to minimize the cost of social remedy and its time allowance/inteference with capitalistic solutions.... Perhaps even further adjustments could finally be made such as eliminating US's "Socialized Agriculture".....which has been socialized for many years......
Margrat Thatcher had nothing to do with "Englands" rebound from junk ratings. England's Gov. Bonds were trading worthless right when Thatcher came abord. The Academic "Text' books have her as the "Saving Grace" to England and a return to positive ratings on their bonds, her doing. That is False. She was at the right place at the right time. The oil discovery in the North Sea brought England out of her 'Negitive' rating, bankrupt situtation. She just happen to be in office when the Pipelines were turned on and the oil flowed. OIL SAVED THE QUEEN, not Thatcher. Same with the new Clowns in office. Homie the Clown and his VP side kick. With all this stimulation to the world economy, it will turn around and cause another buble. It will not happen in 09, IMHO 09 will be the year the Gov. declares a Depression. But the Economy will turn around under Obama's watch and he will look like a Hero. Do your research.
Why would the economy turn around under Obama? Because we are going to repave our roads? How is diverting trilions of investment dollars to gov technocrats going to turn this economy around How is increasing our national debt by an exponential factor signaling our creditors that the time to cut us off is soon. You are right about the UK, but where is our pipeline ? Any turn around would be short term and illusory There is nothing we are doing to fundementally alter our economic infrastructure instead we have chosen a path of more central planning and regulation with an added dose of currency debasement not a recipe for financial prosperity GTFO now