It Has All Hit the Fan in 2008

The federal government’s takeover of Fannie Mae and Freddie Mac is the culmination of many years of financial irresponsibility by our government, bank regulators, investment banks, consumer banks and Wall Street. This blog predicted that it would all hit the fan in 2007, which it did. Now in 2008, we are seeing the logical endgame to this whole mess.

Do I believe we’re out of the woods?

Not at all. I believe the damage done to the global financial system is unbelievably massive and we will experience repercussions for years to come. After all, where is the money going to come from to back up the trillions of dollars in mortgages held by Freddie and Fannie? As usual, the Fed will create the money out of thin air.

And what about the half-a-quadrillion dollars ($500 trillion) in derivatives that are still floating around out there? There’s still a lot more that will potentially hit the fan in 2008 and beyond.

Here are links to the previous posts from the series “It Will All Hit the Fan in 2007”:

Part 1
Part 2
Part 3
Part 4
Part 4 (Addendum)
Part 5
Part 6
Part 7
Part 8
Part 9
Part 10
Part 11
Part 13
Part 14
Part 15