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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Cactus Jack who wrote (281257)	10/6/2010 1:07:57 AM
From: Giordano Bruno	Read Replies (1) \| Respond to of 306849

Might I interest you in some Arizona wetlands?

To: Cactus Jack who wrote (281257)	10/6/2010 9:57:00 AM
From: pstuartb	Read Replies (4) \| Respond to of 306849

No, the Fed has been printing money and buying assets like Treasurys to try to keep rates low And the main reason they need to keep rates low is because we're drowning in debt. If rates on the 10-year were to normalize up to say 5%, the federal government's interest payments on the national debt will take up about half of all tax receipts within a couple years. According to Denninger's calculations. Interest payments on the national debt are now about 20% of the federal budget. Watch that explode if rates on the 10-year were to double back to normal historical levels. And going back to normal historical levels on the shorter-term T-bills that the Treasury keeps rolling over to the Fed would require a lot more than a double. And to maintain entitlement spending when more and more has to be spent on interest payments requires the issuance of more debt. They're trapped. Can't let rates go up, can't quit buying.