Thomas Wagner

The Reality of Government Spending and Money Supply

Very good article on what theoretically should happen. Unfortunatly most gov't, including ours, are now printing money in the form of treasury notes, stimulus payments and bailouts. This is being matched by foreign banks such as China, which on one hand spends 586 billion in stimulus payments and on the other promises the US that they are "not going to aggravate the current financial crisis by selling there US T-note holdings. Unfortunatly, you can only have your cake and eat it too for a limited period of time. Right now the balance sheet is holding as investors buy the dollar our of necessity to unwind derivative positions. Look out below when the hedge funds liquidations and unwinds are done.