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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: GST who wrote (34861)6/27/2005 2:30:14 PM
From: mishedlo  Read Replies (1) of 110194
 
On the demand side, the foreign borrowing requirements of the US are driven by the current account deficit and government debt -- both are needed to get a sense of the cost of renting money from foreign sources. US interest rates are not set in the US -- they are set by the foreigners who decide how much it will cost us to borrow their money.

I forgot to add
You are severely underestimating demand in the US
Finally if rates are set by foreigners, why did rates not rise when foreigners pulled back their purchases?

Mish
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