Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (33982)	7/21/2005 4:59:31 PM
From: Tommaso	Read Replies (1) of 116555

>>>You act as if everyone is going to pull all their money out of everywhere and just sit in cash.<<< Huh? Where did I say that? What I said was that there is not enough buying power in the United States to replace the purchases of Treasury bonds that have been made by foreign buyers. Foreigners (banks, companies, individuals, outside the United States) have been subsidizing the U. S. Government. If they cease doing this, or even slow down their purchases, the Federal Reserve may have to rescue the Treasury by monetizing U. S. debt. Also, higher interest rates will have to be offered. I was once spoken to with contempt similar to yours many years ago. At that time, I suggested that interest rates might decline from the 16% that many corporate bonds were then paying. "Interest rates ain't NEVER coming down," I was told. I think you might wish to go back and read more carefully what I said.

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