To: J_F_Shepard who wrote (45412 ) 11/17/2017 11:57:24 AM From: Brumar89 Read Replies (1) | Respond to You initially didn't link the new borrowing to only retiring old debt. You wanted to raise more new debt on infrastructure. You only started talking about only retiring old debt when the folly of adding to the debt just because rates were low was pointed out.From: J_F_Shepard 2 Recommendations Read Replies (2) of 45435 With interest rates near zero, why shouldn't we borrow as much as we can to cancel high interest debt and then add a bunch more for infrastructure improvements ... would cost us near nothing..
macrotrends.net Since the financial crisis, increasingly, U.S. Treasury issuance has occurred at the short end of the interest rate curve. Unlike many mortgage borrowers who refinanced their mortgage debt to lock in lower long term interest rates, the government has issued a majority of new debt at the short end of the interest rate curve . seekingalpha.com ...... “We’re looking at kind of a stabilization from here” in the weighted average maturity (WAM) of Treasury debt, acting Assistant Secretary for Financial Markets Monique Rollins said at a press briefing in Washington on Nov. 1. The average maturity of the $14 trillion-plus in marketable Treasury debt outstanding was at a near multi-decade high of more than 70 months on Sept. 30. That’s up from 49 months in December 2008 and is above the 60-month historical average dating back to 1980. It’s still, though, about a year less than the average of the Group of Seven industrial nations, according to data compiled by the International Monetary Fund. The Treasury maintained its longer-term debt sales at $62 billion this quarter for the seventh straight time, opting to meet any increased financing needs from run-offs by the Fed through the sale of bills. .... bloomberg.com Yields on longer-term Treasury debt serve as benchmarks for everyone from home buyers to corporate treasurers. A “steepening is where we could get into problems with the housing market,” Tannuzzo said. "I'm the guy pushing a trillion-dollar infrastructure plan," said Bannon. "With negative interest rates throughout the world, it's the greatest opportunity to rebuild everything. Ship yards, iron works, get them all jacked up. We're just going to throw it up against the wall and see if it sticks." ..... The Hollywood Reporter :"I'm the guy pushing a trillion-dollar infrastructure plan," said Bannon. "With negative interest rates throughout the world, it's the greatest opportunity to rebuild everything. Ship yards, iron works, get them all jacked up. We're just going to throw it up against the wall and see if it sticks." Turning Chinese (and Japanese) The perfect of example of this mistake can be found in China. Over the past two decades the country's economy has modernized at breakneck speed. That, of course, meant building housing and roads, bridges and trains. It was a marvelous growth engine until it wasn't. And it wasn't anymore when those roads and bridges started leading to nowhere, and those housing units stayed empty. That all happened because the government started building things for which there was no demand. In its quest to boost growth and keep people employed, China instead just ended up racking up the massive debt that is creating such huge problems for the Chinese economy. That's why the world now has those infamous Chinese Ghost Cities. To get out of its long-time recession Japan did something similar. It went on an infrastructure building tear, spending $6.3 trillion between 1991 and 2008, according to the New York Times . Now the country has immaculate roads and tons of airports no one needs or uses, but it remains in the throes of its economic downturn. The projects the government built were just not productive enough to bring the country out of its slump, and they eventually just ended up adding to the albatross of debt hanging around Japan's neck. Before Bannon builds any shipyards, he should know that since international trade has been on the decline for the last five years, ship builders have been under intense pressure. South Korean and Chinese shipbuilders suffered a veritable collapse over the last year. So, that's an indication that demand for shipyards is weak, to say very the least. And, if trade continues to decline with Trump's anti-globalization policies, that demand will continue to decline right along with it. Building a shipyard, in that case, will be a horrible waste of money. nordic.businessinsider.com
