This guy, he does have interest.

Over the next few years big decisions will be made in Washington on jobs, the economy, taxes and deficits, energy, education, war and peace.

So we still have the same amount of debt.

Remember, this is the annual interest rate but this is an overnight loan.

But this I just want to show you some data here.

I know that interest rates are fixed in accordance to the borrower's business risk.

This difference between this AAA corporate debt and the treasury, that is the yield spread.

All we did was, we paid the interest on the debt in this example.

Traditionally, when the fed is more focused on short term interest rates, on overnight borrowing rates between banks, it will use these to buy shorter term debt that increases the amount of currency out there the amount of dollars out there, and so it will

You're still solvent.

They serviced the loans.

This is the retiree health care benefits.

Let's say that the Fed thought that he was systemically important to the future of our financial system.

The Spanish Victory Bond.

So it buys, it buys debt.

It's not accurate, but just gives you an idea.

If someone doesn't pay the debt, then the insurance company will pay it for you.

Helps bring it down.

So you saw where I got my data.

So that's bankruptcy.

You go get bankruptcy protection.

And so when the Federal Reserve or any Central Bank prints money, and it buys debt, it goes out into debt markets and it buys it, it usually buys the safest kind of debt, but that affects all of the debt markets, it goes out and buys in the debt market, they're essentially shifting the supply curve of money to the right, they shift the supply curve to the right.

The yield on the bond is 6 .

But unlike mortgages, a lot of corporate debt, they just pay the interest.

It's generating a good bit of cash, but let's say, these guys eat up interest.

We would create incentives for securitization.

It can do it through debt or equity.

I have 4 billion in residential CDOs, collateralized debt obligations.

Payable to the City of San Francisco.

They're giving it to me for safekeeping.

So these are kind of the important numbers in the home buying scenario.

What is your strategy in your household?

You have 189,000 as the value of this equity.

Have a surplus? Take two tax cuts, roll back some regulations and call us in the morning.

Now let's say it gets even worse.

It's exciting, but we went over our finances and...

So over here you had another liability.

And at the same time, what keeps me up at night is a fear that we'll look at the victories of the G8 50 billion dollars in increased aid to Africa, 40 billion in reduced debt as the victory, as more than chapter one, as our moral absolution.

It allows let's say this group of borrowers let's say this pool of borrowers right here actually didn't

External debt something that I can tell you a long story about because I personally worked on one of the biggest debts on the continent has come down dramatically.

You can sell shares.

Well everyone knows that it's not going to be exactly 10 .

This is highly rated mortgage backed securities, maybe they have a slightly higher interest rate.

Is that the original Victory Bond?

I can no longer fulfill my obligations.