The Ultimate Investor
Imagine if you will that you are the most powerful investor in the world. Imagine you're credit worthy for trillions of dollars. Imagine you could write laws that let you create any type of investment you dreamed. Imagine if you not only made money off your investments, but also made money off of any positive side effects of your investments.
In other words, imagine you are the US government.
Now, as the ultimate investor, what would you do if you could borrow a trillion dollars at <1% interest. The correct answer of course is borrow as much as they'll lend, and invest it in almost anything. Surely the payoff will be >>1%.
Imagine you had the ability to buy a deeply troubled bank, and in so doing transfer your credit worthiness upon it. Most investors worry the bank will go bankrupt, so the stock is worthless, but you can create a law where you lend the bank some money, and in the process it becomes yours. What a sweet deal! Now the bank won't fail because it's got secure backing, and when you go to sell the bank when the recession is over, it will be worth a fortune. Plus it STILL has to pay you back your initial investment.
What if millions of construction workers were getting laid off in the real estate business, and you owned thousands of civil projects that could use some work. Why not buy up all that cheap labor and invest now in these projects. Don't forget that not only do you get to build it cheap, you get 30% of your labor cost right back in taxes.
What if you could buy enough depressed assets to turn around the recession, thus un-depressing all your assets. It's better than printing money!!! (Which you can also do, by the way)
We're in a market situation where the world economy is screwed up. The government is the only player who has any money to invest, which drives down the price of everything. Conversely, people want to invest in the security of the government, so its borrowing rate has been driven close to nothing. If the government was an investor, it would borrow ridiculous amounts of money and buy anything is sight.
Don't look at the stimulus package as a trillion dollars wasted. It's a trillion dollar investment in a situation that will have an incredible return.
In other words, imagine you are the US government.
Now, as the ultimate investor, what would you do if you could borrow a trillion dollars at <1% interest. The correct answer of course is borrow as much as they'll lend, and invest it in almost anything. Surely the payoff will be >>1%.
Imagine you had the ability to buy a deeply troubled bank, and in so doing transfer your credit worthiness upon it. Most investors worry the bank will go bankrupt, so the stock is worthless, but you can create a law where you lend the bank some money, and in the process it becomes yours. What a sweet deal! Now the bank won't fail because it's got secure backing, and when you go to sell the bank when the recession is over, it will be worth a fortune. Plus it STILL has to pay you back your initial investment.
What if millions of construction workers were getting laid off in the real estate business, and you owned thousands of civil projects that could use some work. Why not buy up all that cheap labor and invest now in these projects. Don't forget that not only do you get to build it cheap, you get 30% of your labor cost right back in taxes.
What if you could buy enough depressed assets to turn around the recession, thus un-depressing all your assets. It's better than printing money!!! (Which you can also do, by the way)
We're in a market situation where the world economy is screwed up. The government is the only player who has any money to invest, which drives down the price of everything. Conversely, people want to invest in the security of the government, so its borrowing rate has been driven close to nothing. If the government was an investor, it would borrow ridiculous amounts of money and buy anything is sight.
Don't look at the stimulus package as a trillion dollars wasted. It's a trillion dollar investment in a situation that will have an incredible return.
posted by Ze Ace at
10:43 PM
1 Comments:
Adam, how did they manage to brainwash you into thinking that the bailouts will payoff? Must be something they afre feeding you over at G-land...
By
Anonymous, at 3/03/2009 7:30 PM
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