Howdy Horace,
If the reports are true, world money is flowing into T bills at a rate
unprecedented. These notes pay zero interest. T bills are considered the
only safe haven in the world at present.
What does this tell us? For one, it allows the Fed to learn the amount and
source of the "scared money".
How does this help the Fed?
Write your own scenario.
Consider the Madoff $ 50 bil pyramid scam.. Poof!! 50 bil lost... or... ???
My ole prof used to say,, considering how easy is is to get people to
believe in "coincidences" , it's a wonder anybody would believe in
coincidences.
He also said.. Occam's Razor makes sense when you think about it... given a
basketful of reasons,, sift out the simpliest reason and go with it. In the
case of Madoff... consider how difficult if not impossible it is to "lose" $
50 bil when it takes an army of reports and a battery of CPA/s just to
manage the portfolios.
If the report of what happened to the $ 50 bil is almost impossible to
believe.. then.. it's impossible IF there is a more simple explanation (
thanks to Occam).
Now consider a more simple reason. An inside conspiracy of insiders that had
3 years warning to prepare the laundry.
If this is the better answer, these guys should win the Nobel for " market
timing". They chose the perfect time with a window of opportunity down to 3
days give or take out of 3 years of planning.
Guess where they would send the money?? NOT to Zurich.. not after the
lesson they learned in WW2..
Just don't try to tell a drunk at the Dime Box saloon sum'buddy just up and
walked off with it.
Richard
