On 11/12/2010 10:51 AM, Nicholas Geti wrote: > http://www.nytimes.com/2010/11/12/business/global/12group.html?_r=1&nl=todaysheadlines&emc=a2 > > All of the G20 are resisting Obama on this economic recovery plan. They don't > like the fact that the Feds are issuing $600B of debt because it will make > the dollar cheaper causing loss of imports to the U.S. They want the U.S. to > trim the budget as a way out of our mess. Just like the U.K. is doing right > now by reducing welfare payments, raising school tuition by 300%, etc.
The USA government is manipulating more than just the dollar by having the Federal Reserve buy its bonds. Sure, the government is borrowing $600 billion dollars, which will increase the national debt, but by having the Federal Reserve on the ready to buy the bonds with interest rates yields next to nothing, the USA government keeps interest rates artificially low, not only for the government, but throughout the economy. If the government didn't have the Federal Reserve on the ready to buy its no yield bonds, competition would require the government to offer greater returns to those who purchased the bonds. Without the Fed's guarantee to buy the bonds, the government would need to offer higher yields on its debt in order for the bonds to sell in a free market. This in turn would require corporations, individuals, banks, to others to offer higher yields on their debt instruments in order to compete for a share of this market. Also, entities that are paying higher rates of returns on their debt, must charge higher rates on those who borrow from them. Usually an entity is going to charge a couple of points over what its paying for money it lends out. Regards, LelandJ > Obama refuses to bite the bullet and instead wants to raise taxes rather than > cut any spending. > > BTW. Why does the U.S. have so many of our troops in practically every > country in the world? Let's bring them home and stop subsidizing these > countries. I can just imagine the howl if we do that. But its good for us. > > > > > > --- StripMime Report -- processed MIME parts --- > multipart/alternative > text/plain (text body -- kept) > text/html > --- > [excessive quoting removed by server] _______________________________________________ Post Messages to: [email protected] Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/[email protected] ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
