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Politics : Idea Of The Day

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To: Nemer who wrote (13589)11/6/1997 2:32:00 PM
From: IQBAL LATIF  Read Replies (2) of 50167
 
Nemer- I talked on BK because the underlying argument made by the poster was contradictory- deficit financing is a good financing if it is spent on development and research alongwith improving ailing infrastructure or quality of human capital- US has been wisely utilising its borrowings if they decide to retire US debt as they have already made a resolve not to contract new deficits- imagine how deflationary shrinking deficits can be moreover massive liquidity chasing shrinking requirement will make these assets very dear- this can only make prime US assets more dearer as quantity of AAA instruments reduces ultimately this will lead to higher premiums on bonds in the first stage and other prime assets in the second stage- US as Cohen is quoted is an oasis of growth amidst slow economic progress made by some of the other OECD countries.
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