Posted on 09/20/2011 11:18:41 AM PDT by library user
Are we screwed???
This is not surprising at all. People usually dump bad investments if they see a crash coming.
Well, in that case, why has the price held up so well? Why is the Treasury able to sell them at low interest rates? Who are the buyers now?
The only one buying Treasuries is the Fed? That can’t be good.
Bibi and Pootie are no fools
Who are the buyers now? We are! The Printing press is running overtime.
That is why foreigners are quiting our bonds, they have to pay real money for them.
Uh oh!
Where in the world do investors get the money to buy our securities? Are all these countries better off than we are?
No, are you kidding? Why should anyone worry about this? If foreign governments won’t buy US bonds, the Fed will. They can buy an infinite amount of treasuries. It is a never ending money machine. Only saps like us don’t appreciate the beauty of this.
Has China transferred its holdings out to the various municipalities and “companies” (which usually have a state-ownership component anyway)? Israel has been on a very decent growth clip, and did not hit the recession in 2008 as hard as we have. They have a well respected man running their central bank - he was a candidate (with almost no chance of winning the seat) for the IMF directorship. He was a deputy director of the IMF for a while before taking the post at the Israel National Bank or whatever their Fed is called.
I suppose given their growth rate, they couldn’t stand seeing their foreign reserves sitting at near zero. They probably have good intel (ahem) on places to put money that are safe and still earn decent return. Plus, over the last 10-15 years the USA has become a less important trading partner, as Israel has been able to open new markets. It is only natural that they diversify their holdings to represent their more diverse trade.
Here is the important part (I tend to be verbose at times). The reason many are divesting is because the return is so low. That means at some point the return has to go up. Meaning, interest rates will go up. Obama and the Congress MUST REALIZE that if and when rates go up, SO WILL OUR COST TO MAINTAIN THE DEBT. If interest rates go to 5% then our debt maintenance costs will skyrocket, and our budget will get blown again and again. Can we keep interest rates low for 30 years? If we are paying $200 billion a year interest on the debt now, and rates double, we will pay $400 billion a year in interest. It is not only possible but conceivable that interest on our debt will consume a large portion, a majority or even all of our tax revenues. THEN WHAT?
Well, we will have riots, and the only action will be to shut down the federal reserve bank. We have done it several times in our history. It is probably inevitable that we will do it again.
That was my question. If Russia and Israel are selling their T Bills. Who is buying them?
I suspect it is the Fed also, if so we are deep doo-doo.
We cannot use Monopoly money and stay above water. We are sinking fast and Obama is spending faster than they can print it.
It seems now the only people assured jobs are the workers at the printing office that prints money.
Zimbabwe inflation cannot be far away.
Russia has lots of real assets in the form of oil. Now that it has had decades to show it is not the communist empire monster the world once feared (shenanigans in Georgia notwithstanding) nobody’s afraid to buy its oil. With oil at windfall prices today, why should Russia need any steenkin’ US Treasury notes?
Israel has LOST FAITH in the USA —conceptually I can relate, but it still sounds ironic and hugely AMUSING.
Hmm...let me turn it over again in my mind:
“Israel no longer trusts US money...”
HAHAHHAHA...! Oh wow, now that is REALLY funny..!
I dumped most of my government bonds over the last year, and put the money into corporate bonds.
I think there is more likelihood of a government default than a corporate one.
Corporations earn money. Governments just suck money like a leech and burn it up (to mix metaphors).
Buyers now are individuals, companies and countries willing to lose a bit of value in return for security. The security of an overwhelming military power.
Besides, there’s no growth to invest in. That will change, though in other countries before here in America
As other countries’ economies start growing- providing investment opportunities- we’re gonna be hurting awful.
Nothing to worry about. The Fed will buy all of these bonds. (with our money). Move on, nothing to see here.
Well, this is definitely not good, for sure! When your former ‘enemy’ dumps his ownership of your debt ALONG with your now-former Ally (in case no one has come to the realization - ISRAEL), you are in one big tall pile of deep Kimche.....
Reminds me of the scene in Southpark when Cartman gets all ascared when the teacher introduces the class to Mohammhed something or other, their new class mate....”Whoaaa....dude...NOT cool! Definitely NOT COOL.....no way....I’m outta here.......whupp whupp whupp!......” Funny as hell...it was the Hillary Snuke episode...
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