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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Lizzie Tudor who wrote (106144)2/22/2008 1:40:07 PM
From: HawkmoonRead Replies (2) of 306849
 
With the President’s plan, we are now on track to eliminate the nation’s publicly held debt by 2012.

Ok.. here's something for you to chew on..

What happens when the national debt is eliminated (or at least minimized to the extent that the gov't stops issuing 30 year T-Bills)??

Where does that long-term money attempt to find an equivalent financial instrument??

(hint.. it has something to do with Real Estate.. ;0)

Furthermore, when the government runs a "surplus" in Social Security, did you know that actually increases the National Debt?

Think about it... where do those excess FICA revenues get invested? The private market? No.. they go into government bonds..

And you still didn't answer the question as to why the 10 year bond yields have been substantially less than the Federal Funds rate for the past several years. Yields go down as demand for those available bonds go up. So why has the government been able to borrow at a lower interest rate for 10 year paper, than the private is able to borrow from the Fed overnight?

Thus.. without that $4 Trillion in additional spending, logically there would be even fewer government bonds available to meet the demand for them.. Which would have driven the yields down EVEN MORE..

Think hard about that..

Hawk
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