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Politics : American Presidential Politics and foreign affairs

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To: DuckTapeSunroof who wrote (44950)	8/18/2010 5:20:54 PM
From: TimF	Read Replies (1) of 71588

Re: " Its a government IOU to itself. Its essentially meaningless." It is a special class of US Treasury Bond. True, but that doesn't prevent it from being essentially meaningless. When I buy a bond, I own a claim against someone else. To the extent that the debtor is reliable (or in terms of what I can sell it for to the extent the debtor is generally perceived to be reliable), its an asset for me. But if I issued a bond, and bought it myself, then I have not gained any asset. A bond is more formal than a hand scrawled IOU, but a loan to yourself is not an asset no matter how formal the instrument you use. If it is "meaningless" then ALL US Treasury Bonds are "meaningless". No because a lot of those bonds are not "self loans". An obligation that you can call on from someone else is an asset. An IOU to yourself isn't, even when its the federal government writing the IOUs to itself. Debt isn't an asset when you are the debtor.

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