BGR:
Ok, let's just cut to the chase,.....
Like well over a trillion dollars worth of U.S. IOUs (how many zeros is that?) floating around the globe. Need we discuss what occurs if this "paper" is sold back into the US? Or starts to flood the already flighty bond markets? As it isn't going to be repaid (at least not before significant monetization can work its magic), and as a new Weimar Republic isn't (yet) palatable, what to do?
Now let's add in half a billion in annual trade deficit. Sure hope those foreigners don't become disenchanted, because their dough flowing in keeps that outflow in balance,... but for how much longer?
So let's cut that U.S. interest rate and see if those offshore boys decide to hold or sell the wallpaper. Too dangerous? Not worth taking a chance? Obviously, lower interest rates would make everybody happy (including the federal government,.... lower interest rate costs). Is the Fed just being philanthropic with respect to those foreign bond holders?
If that doesn't define the "need" to maintain the interest rate differential, then perhaps I should have chosen a better word,.... like "no alternative" (g)
Best, Earlie
Best, Earlie |
