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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: John Vosilla who wrote (47394)	12/15/2005 11:23:26 AM
From: russwinter	Read Replies (1) of 110194

Since a big bulk of that as you point out is foreign that gives the Bernake fed even more reason to debase.> I believe the ability of these CBs to monetize this deluge of debt is totally overblown. We are going into unbelievable waters. Here's some numbers to chew on: going into the 1Q, the Treasury intends to borrow about $57 billion per month (I think it will be even higher). On top of that the trade deficit is running $70 billion a month. Here's the contribution from the US public, nada, zippola: idorfman.com In the last year debt monetization from the Fed has been about $2.5 billion per month, and "help" from FCBs has been good for another $15 billion. Combined that's $17.5 billion from monetary authorities to monetize an expected $127 billion a month in new debt to finance the twin deficits. Even if they ramp up debt monetization the deluge is so severe, it won't matter. It's way past the tipping point, this is where I expect interest rates to explode, for them not too, would like asking a midget on crutches to salm dunk a basketball.

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