Number of the Week: $10.2 Trillion in Global Borrowing

Wall Street Journal
Nov. 07, 2010

I love how delusional this line is:

"..the U.S. and other advanced nations are putting pressure on China to allow its currency to appreciate against the dollar. All else equal, such a move would curb demand for dollar-denominated debt from a country that is the largest foreign holder of U.S. Treasurys.

In the U.S., domestic investors could pick up the slack. The Federal Reserve has committed to buy an added $600 billion in U.S. government debt over the next eight months. Demand from households has been very strong as U.S. consumers boost their savings rate. Tighter regulations could push banks to buy more safe assets such as U.S. Treasurys."

In what world is the Fed an investor? That's monetizing their own debt, that's hyperinflationary and suicidal. As to the banks, they don't want government debt, they just got bailed out for all their toxic assets, they're going to stock up on gold and probably flee the country. The line saying "Tighter regulations could push banks to buy more safe assets such as U.S. Treasurys." makes me think they're going to force banks to buy treasuries to prop up the regime. - Chris
$10.2 trillion: The amount of money advanced-nation governments will need to borrow in 2011

As the debts of advanced countries rise to levels not seen since the aftermath of World War II, itís hard to know how much is too much. But itís easy to see that the risk of serious financial trouble is growing.

Next year, fifteen major developed-country governments, including the U.S., Japan, the U.K., Spain and Greece, will have to raise some $10.2 trillion to repay maturing bonds and finance their budget deficits, according to estimates from the International Monetary Fund. Thatís up 7% from this year, and equals 27% of their combined annual economic output.

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