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XMFSinchiruna (26.54)

$10.2 Trillion was a Drop in the Bucket - Latest Crisis Tally



March 25, 2009 – Comments (6)

It's only been a month since the last tally brought us to $10.2 Trillion, but my how the trillions fly when you dive into quantitative easing and pick up the slack for disappearing interest abroad in GSE debt and mortgage-backed securities.

Along with this tally I would like to issue a warning of sorts. We are in way over our heads with the implied debts of these commitments and potential outlays. The scale of their response makes it as clear as day that the scale of the underlying problems remains many times greater than the public has been informed. Despite the calm reassurances from our President on the tube last night, Washington is very much in panic mode. We're in this for as much as $13 trillion and still we see no change, and meanwhile the world is calling for the end of the USD's reign as reserve currency. These are precarious times indeed, and I urge Fools to consider the potential speed with which the present rally could disappear when the next macroeconomic event crosses the wires.

Please read my tally article here, and as always please share your thoughts and concerns here and recommend the article if you like it. 

Also, please see my comments to this article.

I'm drafting a piece today on the international dollar crisis now unfolding, and will post that here as well.

Thanks for reading, and for sharing your thoughts on these critical matters. I feel we are on the verge of some major disruption to the financial framework, and I feel a sense of foreboding in my gut. Please be careful everyone and try not to fall prey to the natural excitement of a quick 1,000-point rally. The bottom is not yet in.

6 Comments – Post Your Own

#1) On March 25, 2009 at 10:26 AM, EHoyle80 (< 20) wrote:

A trillion here, a trillion there: pretty soon you’re talking real money, as that old Republican Everett Dirksen would say today, if he weren’t spinning in his grave. How much is a trillion? In January, “$1 million would have bought you about 6 houses. $1 billion would have bought you about 6,000 houses. $1 trillion would have bought you 6,000,000 houses, or just under 5% of the number of housing units that existed in the U.S. in 2007 (approximately 128 million according to the U.S. Census Bureau).”

Via Stock Research Portal 

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#2) On March 25, 2009 at 10:37 AM, dudemonkey (53.43) wrote:

Very much looking forward to this article.

Is there any reason why TMF doesn't have a commodities-focused newsletter?  That's one I would subscribe to in a second!

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#3) On March 25, 2009 at 11:09 AM, binv271828 (< 20) wrote:

Excellent post!

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#4) On March 25, 2009 at 11:22 AM, XMFSinchiruna (26.54) wrote:

Thanks for reading, guys.

This is totally unrelated, but I just have to post it:

Houston lawmaker asks: 'What's Medicaid?'

Give state Rep. Gary Elkins some credit for being honest.

At a hearing Thursday of the House Committee on Human Services, Elkins and other members of the panel considered more than two dozen bills related to Medicaid and the Children's Health Insurance Program.

Three hours into the hearing, Elkins asked: "What's Medicaid?"

The Houston Republican continued: "I know I hear it — I really don't know what it is. I know that's a big shock to everybody here in the audience, OK."

He could have kept quiet. He could have asked an aide. He could have Googled it. Instead, he asked the question into the microphone in the middle of a public hearing.

Medicaid, for the record, is the federal-state health insurance program for low-income people and people with disabilities. Elkins is new to the Human Services Committee. However, he's served in the House since 1995, where one of the main tasks is crafting the state budget.

A quarter of the state budget is Medicaid.

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#5) On March 25, 2009 at 12:22 PM, binve (< 20) wrote:

............ wow.

That is literally unbelieveable.

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#6) On March 25, 2009 at 12:47 PM, AnomaLee (29.05) wrote:

I'm sure everyone is comfortable that the measure of these outlays exceed our national income. We're slowly tipping towards a breakpoint. I wonder how long from here until this figure doubles NI.

Rep. Elkins is a hillarious individual in a very sad way.


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