Hartford Financial Services Group Inc. said Tuesday it will sell $3.05 billion in securities as part of its plan to repay the $3.4 billion it received under the federal financial bailout.
Here's the model for all recipients of federal funds. Bailout, devalue/boost the stock market, issue equity to repay, devalue/boost the stock market more. Everyone wins, right?
It's an illusion. Eventually the temporary boost fades, as the price of gold accelerates relative to stocks and other financial assets. While the government is certain to cite the terrific returns made on TARP as a great success, they are unlikely to hear much applause from a public without devaluation hedges.
U.S. Large Cap Stocks Capital Appreciation Index (LCSCAI); S&P 500 to Gold Ratio
Source: finance.yahoo.com
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