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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Oeconomicus who wrote (17111)1/19/1999 9:30:00 PM
From: Kip518  Read Replies (1) of 18691
 
the effect on interest rates would be negative (i.e. higher rates) simply because the surplus effectively reduces the government's demand for borrowed funds

RD, also interesting to think about the consequences of taking SS money that is currently used to buy U.S. debt (t-bills, etc.) and divert it to the market. Even with budget surpluses as far as the eye can see, the government must continue to borrow to fund the national debt (no proposal to reduce it -- see URL below). The effect, one presumes, is that that portion of debt previously purchased with SS funds will now have to be sold to the public and/or foreigners. Higher interest rates seem inevitable.

publicdebt.treas.gov
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