Saturday, December 19, 2009

Who Will Buy The Debt?

Perhaps a debt ceiling will be imposed on us if we don’t have the will to limit ourselves. 

In a discussion on the global role of the dollar, Zhu told an academic audience that it was inevitable that the dollar would continue to fall in value because Washington continued to issue more Treasuries to finance its deficit spending.

He then addressed where demand for that debt would come from.

“The United States cannot force foreign governments to increase their holdings of Treasuries,” Zhu said, according to an audio recording of his remarks. “Double the holdings? It is definitely impossible.”

“The US current account deficit is falling as residents’ savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world,” he added. “The world does not have so much money to buy more US Treasuries.”

(10) Comments
Posted by Owen at 1211 hrs
Economy + Foreign Affairs + Politics + Politics - General

  1. Well clearly, if the current crop of super-liberals can’t control themselves, external forces will do so for the… and those controls will mete out a harsh economic justice if, and when they do.

    Government has to pay for spending by either taxing, borrowing, or printing money. Each has it’s own consequences. Taxing harms the economy. Borrowing creates future debt and saps resources with interest payments… and it is limited by the fact that people may decide not to lend you any money that they feels won’t be repaid. Printing money causes currency devaluation and inflation. All three, if used excessive, will collapse a nations economy.

    It seems that Barack and Harry and Nancy are trying to abuse all three methods to see which one will destroy us first. What a bizarre time we live in when we need to look to the Chinese to come and save us from our own government. Who would have guessed all this only a short year ago?

    Posted by .(JavaScript must be enabled to view this email address) on December 19, 2009 at 1359 hrs


  2. Sorry for the typos. I am commenting with the assistance of a house-cat. Nuff said. <meow>

    Posted by .(JavaScript must be enabled to view this email address) on December 19, 2009 at 1401 hrs


  3. Notice that this warning about not subsidizing the President’s spending came right around the time that he tried to stand up to China about allowing inspections to verify the Copenhagen anti-global warming compact.

    The Red Chinese promptly walked out in a huff and Copenhagen failed, and then Mr Zhu announces his bombshell about not buying more of our public debt.

    Once again, the Obamateur is given a lesson in how unqualified he is to be President.

    Posted by .(JavaScript must be enabled to view this email address) on December 19, 2009 at 1624 hrs


  4. The problem is the liberal governing elites don’t really understand that China has kept us afloat the last ten-years. 

    The whole story is too complicated for them. 

    This whole period reminds me of 1999 when people kept taking out home equity loans to buy tech stocks.  Logic dictated the NASDAQ 5,000 game had to end and end badly.  But the emotion ran for a couple years with no consequences.  So people kept forging full steam ahead off the edge of the cliff.

    Posted by .(JavaScript must be enabled to view this email address) on December 19, 2009 at 1954 hrs


  5. @ Steve: The one difference between those tech stocks buyers and Barack and Nancy and Harry is that the tech stock buyers bought those with their own money, and Obamateur and Co. is doing it with money that my children will have to pay back… assuming he does not completely destroy the economy.

    Posted by .(JavaScript must be enabled to view this email address) on December 19, 2009 at 2145 hrs


  6. Lloyd, you are absolutely correct. 

    It’s amazing how liberals at all levels have such a lack of understanding of economics… from the WBSB to BHO…

    Posted by Smeety on December 19, 2009 at 2345 hrs


  7. This has to be said. BOTH parties have been spending recklessly for a long time. While the Democrats currently in control have taken it to a level never seen(they ARE talented), the Republicans sudden fiscal piety sounds like an off key note. They had control, and did little of substantive note to control spending, not to mention address true enegry independence. Where do we go? The Democrats are spending us into bankruptcy, and when the Republicans gain control, they go ‘native’ after a couple of years. Remember Newt, and the last Republican revolution? They followed through for a few years, then, bupkis.

    Posted by Billiam on December 20, 2009 at 0701 hrs


  8. Billiam,
    Dead on.  In the short term the Republicans need to ride a wave in 2010 to bring the spending back down to earth, but in the long run we need to all be held more accountable as to what we allow our elected officials to get away with.

    Posted by .(JavaScript must be enabled to view this email address) on December 20, 2009 at 0922 hrs


  9. Balanced budged amendment… and we need to have a government willing to build in a structural surplus, until our national debt is payed off. Servicing our multitrillion dollar debt is going to cause much more harm in the coming generation as we begin to see development in 3rd world countries, and potential growth in the United States begins to level off.

    Economic growth in Africa, India, China etc. is going to limit the possibility of further economic growth in this country. If we don’t have our economic ducks in a row, we are going to get slammed.

    Posted by .(JavaScript must be enabled to view this email address) on December 20, 2009 at 1308 hrs


  10. Last year, my mom made me do a research paper on our national debt.  I’d be happy to share my findings with congress. lol

    Posted by JosiahCantrall on December 20, 2009 at 1642 hrs


Commenting is not available in this channel entry.