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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: sea_urchin who wrote (22689)	3/18/2005 1:22:00 PM
From: philv	Read Replies (2) \| Respond to of 81023

Back to flogging my favourite dead horse, debt! The headline reads: Cheney: Social Security Plan to Cost Trillions The source of this money is of course borrowing. washingtonpost.com But of course, who cares? That money will have to come from somewhere, and where else but from foreign sources? Here is an historical graph to illustrate foreign "investment" in the US. idorfman.com The biggest bag holder of all is Japan. If you can slog through this article, it explains the financing of America and world wide reflation. financeasia.com "So, what did motivate the monetary authorities in Japan to create the equivalent of 1% of global GDP and lend it to the United States? Was it simply, straightforward self interest to prevent a very sharp surge in the value of the yen? Was it globally coordinated monetary policy designed to pull the world out of the 2001 slump and prevent deflation in the United States? Or, was it necessary to stave off a US balance of payments crisis that would have produced a global economic crisis? Perhaps it was only straightforward foreign exchange intervention to prevent a crippling rise in the value of the yen. Intentionally or otherwise, however, by creating and lending the equivalent of $320 billion to the United States, the Bank of Japan and the Japanese Ministry of Finance counteracted a private sector run on the dollar and, at the same time, financed the US tax cuts that reflated the global economy, all this while holding US long bond yields down near historically low levels. In 2004, the global economy grew at the fastest rate in 30 years. Money creation by the Bank of Japan on an unprecedented scale was perhaps the most important factor responsible for that growth. In fact, ¥35 trillion could have made the difference between global reflation and global deflation. How odd that it went unnoticed." And from the first article, it is clear that the US will be demanding ever more credit. The party just goes on and on and the booze, thanks to the kindness of foreigners, just keeps flowing. Life is good!