We won’t let Freddie, Fannie fail : US Gov’t
Freddie Mac, Fannie Mae are safe, so are bank deposits (up to US$100,000, the federal deposit insurance limit.)
In announcing the the two companies are somewhat akin to offspring of the government, the government also said they could not let these two fail as between them they hold or guarantee approximately 50% of all US (residential) mortgages.
Their collapse would likely lead to many more collapses at best and systemic failure, total collapse of the financial markets at worst.
Not to be underestimated.
Of course over the weekend, we also saw another US Bank fail : IndyMac which reopened under US Fed management.
News commentators of course ask, who pays the bill, answering themselves ‘US taxpayers.’
I think, however, they forget, that the result will be more money printing and therefore affect anyone holding US-dollar instruments - causing losses due to devaluing of the currency.
Of course anything denominated in US Dollars should go up as the effect of inflation hits. In real terms this may be preserving wealth, not making a profit, but I’d rather that than lose.
That’s why people are buying gold and silver.
And property could be another attractive investment to preserve wealth, potentially generate cash-flow or at least as a place you can live in.
Afterall, you can’t live in share certificates, or gold (unless you build a house out of it I suppose.)