Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (72356)	2/6/2010 7:04:56 AM
From: Haim R. Branisteanu	Read Replies (1) of 74559

TJ, next week the US is auctioning their worthless debenture at well above fair value - the US needs a strong USD so the participants can hedge their purchases of Treasury notes. The comments of Triche and German Finance minister is clarifying it all - they revolt at the fact that the US with a over 10% of the GDP budget shortfall is capable to raise at below real inflation money to finance this deficit, for the mere reason of market manipulation. There are several states in the US with GDP far bigger than the PIIGS who are able to issue Munis at very low rates - this irks the Europeans who in turn are buying the debt issued by Greece, Portugal Spain etc. A high interest on debt in a non inflationary environment makes the issuance very costly. I presume that the market is not controlled only by US firms and the situation is temporary

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