That’s what Angry Bear says about the government bailout of mortgage giants Fannie Mae and Freddie Mac, announced on Sunday, September 7. It will cost the American taxpayers tens of billions of dollars we don’t have. Why? Because more than 1.3 trillion dollars’ worth of those mortgage bonds are held by foreign countries, primarily China, Japan, the Cayman Islands, Luxembourg and Belgium, and they want to know if their holdings are any good.
Now, you might be struck by some of those listed ‘foreigners’. Cayman Islands? Luxembourg? Belgium? Well known for hosting questionably legal accounts for some questionable characters, I suspect we’d find a lot of Americans on those lists. Americans don’t count as “foreigners.” Unfortunately, we’d also find a lot of Russian front companies and Middle Eastern Sheiks as well.
We’ve once again been robbed blind by wanton corporate and individual greed, and we are expected once again to bail out the wealthy speculators whose greed led to the failures.
Predictions for what happens now aren’t pretty. The dollar will plunge, inflation will zoom, regular Americans will have an even more difficult time keeping up. While the richest 1% will have their taxes cut and get their bad investments paid off so they can go speculate on other nifty things like food and water.
So buckle up, fellow shoestring budget enthusiasts! We’re going to get our chance to put all our alternative survival strategies to work. If we do it right, what will arise from the ashes of the late, once-great American economy might be strong enough to last awhile.
Links:
Bonddad: Our Foreign Masters Have Spoken
Fannie Mae and Freddie Mac: A Broader View
The Fannie/Freddie Bail-Out: The Plan and Why Now?