Using the power of government to inflate a currency…
In many cases (specifically China) the government is actually intercedeing and purposefully deflating the currency in order to keep their labor at a competitive advantage in the global marketplace.
Let’s keep in mind that this rescue capital is going to be tremendously profitable for these Sovereign Funds. For a frame of reference, look at the rescue capital that Warren Buffet gave Salomon Brothers years ago.
The biggest irony here is that this intensely capitalistic idea of “we must have free markets with no intervention” that actually keeps us from opening up our Sovereign Wealth Fund (Social Security) from taking advantage of these same once-in-a-century investment bargains.
If we took and applied the same investment banking and financial standards to our country’s balance sheet, cash flow and business opportunities as we do some of our largest corporations, the US could dramatically reduce it’s current issues.
Once in a century? We need to wait until the bottom.
"In fact, the parallels between our present situation and the period preceding the Great Depression are striking. Just as massive debt was accumulating in the market from the purchase of stocks ï¿½??on marginï¿½??, so too, mortgage debt between 2000 and 2006 soared from $4.8 trillion to $9.5 trillion. In both cases the ï¿½??wealth effectï¿½?? spawned a spending spree which looked like growth but was really the steady, insidious expansion of debt which generated economic activity. In both periods wages were either flat or declining and the gap between rich and working class was growing more extreme by the year. As Paul Alexander Gusmorino said in his article, ï¿½??Main Causes of the Great Depressionï¿½??:
“Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920’s, and the extensive stock market speculation that took place during the latter part that same decade”.
The same factors are at work today except that the speculation is in real estate rather than stocks.