As if we needed any further proof that Gold is the best place for our money
to be. Our government just backed the mortgage debt with its Gold reserves.
The massive influx of newly created money being printed will cause the
dollar to continue to drop to near nothing. If they felt the dollar was
going to gain in value they would back it with the currency!
What is the most important asset in all of these bailouts? Tangible
Wealth! Real Estate! Not paper. This also could be a precursor to
government confiscation of all BULLION. If things get worse and they could
very rapidly it is clear now that the U.S. wants gold to back its most
valuable asset.
US Government to secure mortgage market with gold reserves
The U.S. Treasury Department has promised
“hundreds of billions” to save the US markets using its own
gold reserves.
President Bush approved the use of existing authorities by Treasury
secretary Hank Paulson to make available as necessary the assets of the
Exchange Stabilization Fund for up to $50 billion to buy more illiquid
mortgage assets.
When the Government bailed out the the Government Sponsored Enterprises
it promised to buy illiquid mortgage backed securities, but this
announcement extends that pledge.
The ESF was created after the Great Depression and uses the US gold
reserve as collateral for financial stability.
The plan will involve Fannie Mae and Freddie Mac increasing their
purchases of mortgage assets. The Government will also expand its own
purchase program for mortgage backed assets, which was announced recently,
to help increase the availability of capital for more mortgages.
Paulson says he will also work with Congress to create new legislation
that will allow all mortgage backed securities to be bought up by the GSEs
and the Government, instead of just those that fit within existing
legislation.
This move is exactly what mortgage industry professionals have been
calling for the UK Government to make. Earlier today, the Intermediary
Mortgage Lenders Association urged the UK Government to take similar
action. The Council of Mortgage Lenders also reiterated the call for help
with illiquid assets.
Paulson said a press conference in Washington: “We are talking
hundreds of billions of dollars, This needs to be big enough to make a real
difference and get to the heart of the problem.”
“This morning we've taken a number of powerful tactical steps to
increase confidence in the system.
“The underlying weakness in our financial system today is the
illiquid mortgage assets that have lost value as the housing correction has
proceeded. These illiquid assets are choking off the flow of credit that is
so vitally important to our economy.”
Paulson says the Government will buy the illiquid assets but he urged
that “this troubled asset relief program must be properly designed
and sufficiently large to have maximum impact, while including features
that protect the taxpayer to the maximum extent possible.”
_____________________________________________________________
As the dollars being printed make it into circulation it will cause the
value of the dollar to drop for YEARS to come. After all the more trillions
they print the easier it will be down the road to pay off the debt with
massive amounts of worthless paper. We all need to place ourselves on our
own Gold Standard and buy Private Numismatic Pre 1933 Gold coins while the
supply lasts which may not be very long.
Article source: http://www.moneymarketing.co.uk/cgi-bin/item.
cgi?id=173208
JMC
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