That article is actually a "fake WSJ article".
It's really just an article from Naked Capitalism that got linked to from WSJ along with a bunch of others.
That said, I'm not saying I don't agree about the insolvency or fakeness of the recovery...
won't last long....just about every country hates us at this point and compound that with the arrogance of the B*sh administration and manipulated banks........they are already working with other currencies out of necessity.
people will take a beating only so long.....now they are stiking back economically....and we will suffer sad to say.
We are the world reserve currency FOR NOW. You are a fool if you think we can continue down this road indefinitely while the rest of the world foots the bill for us. Frankly it is immoral to ask that of them in my opinion.
insolvency is totally irrelevant. in the post mark to market world, the only thing that matters is liquidity, and have a liquidity feast. the best analogy i have is that big US banks are like neurosurgeons finishing residency. they have $300K in student loans and a big time negative net worth (insolvent - capitally "inadequate"). But they are in line for $600K salary as far as their eys can see. For most US banks, under current conditions (yield curve, money pumping) the following is a very attractive equation:
PV future cash flows MINUS bad loans = huge PV
remember most bad loans are backed by REAL COLLATERAL, which will eventually reflate with fed printing. that's all of your thesis on gold remember?
remember most bad loans are backed by REAL COLLATERAL, which will eventually reflate with fed printing. that's all of your thesis on gold remember? >>>>>
Everything reflates when you are wiping your azz with dollar bills. Even toilet paper; hence the reason why you'll be wiping your azz with dollar bills.