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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (54827)	4/6/1999 4:04:00 PM
From: valueminded	Read Replies (1) of 132070

Mike: As long as the government can fool everyone into thinking that long term bonds are a great buy now cause interest rates are heading lower, they can keep this up as long as they want. (look at the long end of the treasuries today) So, companies borrow to buy back shares, FED cuts short term interest rates to allow easy money, shareholders pull money out of the market and go into debt to support the buying spree. Treasury collects record tax revenues fueled by stock market capital gains. Everybody wins <g> Now eventually, you would think we would hit a debt ceiling but as long as we can convince everyone to buy our debt whilst expanding the money supply we should be able to continue. On a side note, it is a good thing we can ignore (and convince bondholders to ignore) the volatile component of the CPI this month as gasoline prices have rocketed 20% within the past 6 weeks.

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