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Non-Tech : The Critical Investing Workshop

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To: Uncle Frank who wrote (7176)	3/13/2000 9:41:00 AM
From: surfbaron	Read Replies (1) of 35685

Unc: The long bond rate affects everything financial in this country. We have 5+Trillion in debt and trillions more in unfunded liabilities, that has to be financed. All the bolshevick about the scarcity of long bonds and the treasury buying them back is crap. We have not paid one damn dime off. Even if the idiot congresscritters are accurate and we have a trillion+ surplus over next 10 years we still have multi trillion to fund. It doesn't make a dent in the debt. GreenEggs can't directly price long bonds only short rates. So when you see long bond rates go up it's because the demand has gone down for them. That's what GreenEggs is scared of. We have been so fortunate since '93 in that the rest of the world's economy sucks, especially Japan and they have been steady buyers of our long bonds. That is changing as Japan is strenghthening financially. The short answer to your question is that if nobody wants our bonds then rates go higher, and the stock market suffers. That's about the extent of any correlation with New Economy and long bonds.

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