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To: pater tenebrarum who wrote (37645)	11/15/2000 11:47:50 AM
From: Lucretius	Read Replies (1) \| Respond to of 436258

hmmmm

To: pater tenebrarum who wrote (37645)	11/15/2000 11:56:42 AM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 436258

Nice riff by Moto-san on the privitization of debt in the U.S.: piraz.com The Threat, a Response and a part to Global Economic Policy Within the past several reports I've attempted emphasis on two issues. The first is an obvious and successful attempt at moving the United States as far, and as quickly as possible, away from a sovereign debt crisis. The second is one concerned more with worldwide economic growth. Five years from being unable to make interest payment on the outstanding U.S. public debt is the stuff of which crisis is certainly made. National legislators who have a penchant for spending what is not theirs to spend and a well-practiced habit of being somewhat thrifty with the truth are of little or no assistance in such matters. Other expertise was enlisted in the form of at least one ad hoc committee, or think tank, convened inside the Washington Beltway during the mid-90's to study and suggest remedies for the debt problem. I know not the recommended treatment, but am certain part of it has been covered on this page within the past two months. An accelerated rate of economic expansion undoubtedly numbered among the primary recommendations. All unnecessary ballast will, therefor, be tossed over the side of the American financial juggernaut at first opportunity to achieve more growth for the U.S. economy. However, unlike what's been published in many market reports over the past few weeks, the Federal Reserve has a number of obstacles to clear prior to conducting an actual rate cut. I am one who believed rates should have been increased again this Summer. The borrowing frenzy didn't appear weakened by current rates, and still does not. The most recent GDP report supports this notion. Plus, we have the Treasury and a variety of government-sponsored home mortgage enterprises ( GSE's ) making a best effort at supporting economic growth. The effort, however, has also skewed expected reaction to a Fed tightening and produced an uneven response with which Mr. Greenspan must now reckon. Yet, the GSE effort is not as single-minded as might first appear. Those of us who occasionally remark on the amount of readily apparent and uninvestigated efforts at propelling U.S. share indices and/or their components needn't wonder why these acts are committed so freely. The U.S. Government has been unburdened by Wall Street's successes. A flourishing Wall Street attracts foreign participation which assists in funding our national account. There is no doubt also that capital gains revenues have aided handily in stabilizing our government's fiscal condition. Too, you won't notice Congress for obvious reasons interfering in developments that seem to ensure the type of growth necessary for resolving the aforementioned debt problem, regardless of statutory implications. And, while within a period of successfully administered economic growth, isn't it fitting that we should rid ourselves of some of the public debt that was central to such a high level of concern only several years ago? Why, also, would you think many foreign official and private sources have been shedding U.S. Government notes and bonds by the tens of billions for more than a year now? Consider also what these same sources are apparently purchasing as replacement, and why Congressman Baker quite suddenly altered his legislative pursuit of the GSE community? There is indeed an effort yet underway to place the U.S. further from the type of concern that might return in relatively quick fashion should the current conduct of either federal fiscal or monetary policy responses prove insufficient at equilibrating what U.S. domestic system imbalances certainly remain. However, it is the transfer of debt onto the personal accounts of Americans that has me somewhat concerned. So, too, does the enormous rise in GSE financing not only serve as an economic growth stimulant, but also a transfer vehicle. It saves a long dissertation to know only that the U.S. Government's account grew more healthy as individual accounts became more indebted; and as rapidly. Too, there is more behind the Treasury's strong dollar rhetoric than many suppose. The creation of enormous amounts of consumer credit, financing more than two-thirds of U.S. economic growth, is systematically destined to increase the health of the national account but risk the possibility of bankrupting many millions of Americans in the process. In order to create credit in such large amounts, and in full view of the world money market, a strong forex rate for the U.S. dollar is an absolute necessity. Though some, it appears, have begun to detect an end to the dollar schema. The second issue for emphasis is one of global economic growth. Though the current world economic cycle has only recently passed its growth apex, I suspect not much will be required in the way of evidence to muster an all-out effort to reacquire former growth. Neither will it require much to assemble a rescue attempt should a substantial financial crisis appear imminent. It is convenient that our global fiduciaries desire much of what U.S. official policy has been directed to achieve. Many nations, yet not all, have participated in a broad monetary expansion, the last installment of which began in 1995. The cooperation of the G-7, 8, 10, 22 nations might be expected when they've all either enjoyed the fruits of the expansionist effort or have had their markets salvaged by accelerating that effort. I would not expect there to be a significant parting of perspectives within the international cooperatives as long as the U.S. monetary vanguard continues to meet with success. Which, as I've indicated in the past, does note bode well for the price of gold. I believe, also, that any decline in the forex rate of the U.S. dollar must be either larger or more sudden than what is already expected in many corners of currency exchange rate analysis prior to a sustainable rally. Had I my druthers, it would not be so.