“Unmitigated Disaster”
July 14th, 2008U.S. taxpayers and dollar holders are essentially going to eat the real estate crisis.
—EMERGENCY: U.S. GOVERNMENT TO TAKE “UNLIMITED STAKES” IN FANNIE AND FREDDIE
Via: Bloomberg:
The U.S. Treasury Department’s plan to shore up Fannie Mae and Freddie Mac is an “unmitigated disaster” and the largest U.S. mortgage lenders are “basically insolvent,” according to investor Jim Rogers.
Taxpayers will be saddled with debt if Congress approves U.S. Treasury Secretary Henry Paulson’s request for the authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, Rogers said in a Bloomberg Television interview. Goldman Sachs Group Inc. analyst Daniel Zimmerman predicted the mortgage finance companies’ shares may fall another 35 percent.
“I don’t know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,” Rogers, 65, said in an interview from Singapore. “So we’re going to bail out everybody else in the world. And it ruins the Federal Reserve’s balance sheet and it makes the dollar more vulnerable and it increases inflation.”
The chairman of Rogers Holdings, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, also said the commodities bull market has a “long way to go” and advised buying agricultural commodities.
Welcome to the USSA.
This article was on Gold Money today. That lunch I just ate doesn’t feel too good in my stomach anymore.
http://www.goldmoney.com/en/commentary.php