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Market alarm as US fails to control biggest debt in history
The Telegraph ^ | 12/11/2010 | Liam Halligan

Posted on 12/11/2010 10:30:27 PM PST by bruinbirdman

US Treasuries last week suffered their biggest two-day sell-off since the collapse of Lehman Brothers in September 2008. The borrowing costs of the government of the world’s largest economy have now risen by a quarter over the past four weeks.

Such a sharp rise in US benchmark market interest rates matters a lot – and it matters way beyond America. The US government is now servicing $13.8 trillion (£8.7 trilion) in declared liabilities – making it, by a long way, the world’s largest debtor. Around $414bn of US taxpayers’ money went on sovereign interest payments last year – around 4.5 times the budget of America’s Department of Education.

Debt service costs have reached such astronomical levels even though, over the past year and more, yields have been kept historically and artificially low by “quantitative easing (QE)” – in other words, Federal Reserve Chairman Ben Bernanke’s virtual printing press. Now borrowing costs are 28pc higher than a month ago, with the 10-year Treasury yield reaching 3.33pc last week, an already eye-watering debt service burden can only go up.

Few on this side of the Atlantic should feel smug. The eurozone’s ongoing sovereign debt debacle has pushed up Germany’s borrowing costs by 27pc over the last month – to 3.03pc. The market has judged that if Europe’s Teutonic powerhouse wants the single currency to survive, it will ultimately need to raise wads of cash to absorb the mess caused by other member states’ fiscal incontinence.

While the UK isn’t ensnared in monetary union, gilt yields have also spiralled 18pc since the start of November – to 3.55pc. British Government debt is officially £1.05 trillion. We are fast approaching a debt-to-GDP ratio of 100pc, compared to 30pc just a decade ago. If you add off-balance-sheet liabilities to Government estimates, including

(Excerpt) Read more at telegraph.co.uk ...


TOPICS: Business/Economy; Crime/Corruption; Government; News/Current Events
KEYWORDS: deficit; devaluation; inflation
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1 posted on 12/11/2010 10:30:29 PM PST by bruinbirdman
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To: bruinbirdman

I say bring back the gold standard, open up the mines in CA, which still have lots of gold in them, and set the price of US Treasury gold at an arbitrary price and keep it there. Also add silver backing to the gold. And STOP borrowing money from every other country in the world, stop spending and stop taxing Americans to death. Do away with the frickin’ welfare state.


2 posted on 12/11/2010 10:39:55 PM PST by calex59
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To: bruinbirdman

I hope everyone likes the taste of ramen noodles. About all we’re going to be able to afford.


3 posted on 12/11/2010 10:42:54 PM PST by Newtoidaho (Liberals are drooling buffoons backed by satanic goons.)
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To: bruinbirdman
What it all boils down to is that we as a Nation are Broke. WE are not only broke but we owe untold amounts of money.Think about all of the things that the Government has to fund that are not on the books like Social Security.We are absolutely flat broke, and the crooks in Washington continue to print more money.
4 posted on 12/11/2010 10:44:00 PM PST by BooBoo1000 (" Let go, and Let God")
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To: bruinbirdman
Photobucket
5 posted on 12/11/2010 10:49:44 PM PST by PanzerKardinal (Some things are so idiotic only an intellectual would believe it.)
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To: BooBoo1000; All

Nah, they can’t even print money. Did you here about the huge printing of $100 bills that had creases in them and all have to be destroyed now.


6 posted on 12/11/2010 10:50:01 PM PST by gleeaikin
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To: Newtoidaho

Well, here ya go... http://www.budget101.com/frugal/ramen-noodle-recipes-1548/


7 posted on 12/11/2010 10:52:01 PM PST by HomersNose
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To: Newtoidaho

That ... may be an unduly optimistic assessment.


8 posted on 12/11/2010 10:56:30 PM PST by Springfield Reformer (Winston Churchill: No Peace Till Victory!)
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To: bruinbirdman
The US government is now servicing $13.8 trillion (£8.7 trilion) in declared liabilities – making it, by a long way, the world’s largest debtor. Around $414bn of US taxpayers’ money went on sovereign interest payments last year – around 4.5 times the budget of America’s Department of Education.

And Republicans have just committed to Obama's massive new stimulus plan in this "Bush-era tax cut compromise". Hundreds of billions in new, useless spending with money we're borrowing. This is after the Republican victory - apparently Republicans like Chuck Grassley and so-called fresh blood like Kristi Noem are too busy oinking for ethanol subsidy pork to worry about the future of this nation or any semblance of commitment to fiscal sanity.

The Republican class that will take over the House hasn't even taken office yet and it's already clear that it's just going to be business as usual. Our political class, Democrat and Republican, is bent on borrowing and spending the US into second-rank status as a nation.
9 posted on 12/11/2010 10:58:09 PM PST by AnotherUnixGeek
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To: bruinbirdman

So, in layman’s terms, this means that... basically we’re all completely fxxxed?


10 posted on 12/11/2010 11:01:08 PM PST by Jack Hammer
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To: calex59

“open up the mines in CA, which still have lots of gold in them,”

They’re probably full of rare bats and rats that need protecting/s;)


11 posted on 12/11/2010 11:20:15 PM PST by Frank_2001
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To: calex59

Don’t trust the us treasury with a
penny nor the government.They have already destroyed a nation and its currency along with their buds the no federal no reserves.These people are nothing more than crooks!


12 posted on 12/11/2010 11:20:20 PM PST by taxtruth (Don't end the fed,jail the fed!)
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To: Frank_2001

They closed them during WWII to allow the man power to go into the military and then failed to open them after the war. When some people tried to open several of them up again naturally the greenies stopped it saying that the chemicals used for mining were terrible things, thus ensuring that thousands of jobs were never opened up in Northern CA.


13 posted on 12/11/2010 11:23:31 PM PST by calex59
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To: bruinbirdman
Around $414bn of US taxpayers’ money went on sovereign interest payments last year – around 4.5 times the budget of America’s Department of Education.

I love how a problem and a factor in its cause are inadvertently embodied in one sentence. The author has no clue but he wrote it but assuredly doesn't see it.

14 posted on 12/11/2010 11:42:53 PM PST by Hostage
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To: Newtoidaho

My wife and I go to antique malls for fun. I’ve found something interesting. A lot of them have junk silver, and a lot of that junk silver is priced at less than $20 an oz, when calculating the actual silver content. Heck, I even get a lot of it in proof sets.

I’ve found a way to make it actually pay to go antique malling with my wife.

Just sayin’... ;)


15 posted on 12/11/2010 11:51:08 PM PST by RobRoy (The US Today: Revelation 18:4)
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To: BooBoo1000

Everything you need to know is right here:

http://www.chrismartenson.com/crashcourse

This has been brewing for a hundred years. It is literally a hundred year, or maybe a thousand year storm. It is not just national, but international, and it is gonna leave a mark.


16 posted on 12/11/2010 11:55:20 PM PST by RobRoy (The US Today: Revelation 18:4)
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To: AnotherUnixGeek

Kristi Noem and pork. Two words that go well together.

I’m sorry I had to say it, I have a crush.


17 posted on 12/11/2010 11:58:40 PM PST by CommieCutter (A Centrist Democrat is now defined as: between Socialism and Communism.)
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To: bruinbirdman
Yup; the dollar is going down, down, down, down ....

Too bad most of the sheeple are clueless about it and about how to protect themselves and their savings. Very sad.

18 posted on 12/12/2010 12:11:42 AM PST by JustTheTruth
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To: bruinbirdman
US Treasuries last week suffered their biggest two-day sell-off since the collapse of Lehman Brothers in September 2008. The borrowing costs of the government of the world’s largest economy have now risen by a quarter over the past four weeks.

Now, what say you Republican legislators who want to vote for this Tax Bill that's chock full of pork?

Well?

19 posted on 12/12/2010 12:12:09 AM PST by TheThinker (Communists: taking over the world one kooky doomsday scenario at a time.)
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To: bruinbirdman

Meanwhile, Congress debates Don’t Ask, Don’t Tell and DREAM amnesty.

The Obama Administration continues a moratorium on new oil wells offshore, has the EPA restricting CO2 emissions and putting a much tighter restriction on ozone, has OSHA putting much tougher requirements on industrial noise levels, and many more regulations that will cost business a lot of money and make them less competitive internationally.

The Democrats seem bound and determined to destroy this country, and they have just about succeeded. We are in for economic hell.

Don’t let people forget that the Democrats did this.


20 posted on 12/12/2010 12:21:22 AM PST by Rocky (REPEAL IT!)
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