Originally posted by reyes:toxic asset buyback scheme will start in about 6mths time.
but question remain
1. whether the 1trillion plan by treasury is enough. it is estimated toxic asset could be few trillion.
2. what is fair value?
3. will bank want to sell at market price?
But considering the original asset price was inflated because of easy credit, how is the scheme going to get back the money?Would house prices ever climb back up to that price without the dollar devaluing ?
From what i can understand, the scheme is funded by the Federal Reserve printing money not because the US government actually having 1 trillion in reserve cash nor have they suddenly discovered a massive oil field/gold mine/diamond mine as actual products to exchange for that sudden 1 trillion dollars that they had.
So when the 1 trillion dollar flow back out into the global economy, does this mean that the US has just robbed the world of 1 trillion dollars worth of resources and services?
hi stevenson,
i din follow the detail how tim G his toxic asset buyback plan.
But from what i know, the banks do classify their toxic asset into category, the super toxic, not so toxic and less toxic. the banks would probably unleash it super toxic first to test market pricing. If market response is poor , the buyback scheme could fail.
as of whether the American is printing money to finance it , well, i dont think they have other way out.
that is why american will never consider allowing USD to be replace as world trading currency.