bosun.j

Savings, Debt and the Global Economy

Smarty, its your world the rest of us only live in it!


On Jan 08 03:51 PM Smarty_Pants wrote:

> "Some of that new savings will go to pay down debt"
>
> Well then, it's not really savings, is it? What's the actual rate
> of savings once personal debt re-payment is excluded?
>
>
> "Theoretically [reduced Chinese demand for our debt] could make it
> harder for the U.S. to borrow money and thereby push up the interest
> rates on our debt (now at extremely low levels)."
>
> Let's not get the cart before the horse. Maybe it's the incredibly
> irresponsible policies of the US Congress to borrow trillions and
> spend them on wasteful projects, often with adverse consequences,
> that is reducing the Chinese demand for our debt.
>
> Or perhaps its the unavoidable conclusion that is rapidly becoming
> apparent, the US won't EVER make good on its debt which causes them
> to search for other places to park their excess reserves.
>
> Whatever the reason, the eventual reluctance by the world at large
> to continue funding the spendthrift American political system is
> what will leave the USTreasury with bids for its debt few and far
> between until and unless rates are increased to attract sucke, ...
> errr ..., uh ..., investors.