HITTING THE REAL DEBT CEILING:
Even as the Treasury issues more and more debt, there are fewer and fewer people willing to buy it. I forgot to mention the really startling number. Pimco (which has now dumped US Treasuries) estimated last month that, under QE2, 70 per cent of the US Government’s debt is being bought by the Federal Reserve.
[ emphasis added]In other words, under the 2011 budget, every hour of every day, the federal government spends $188 million it doesn’t have, $130 million of which is “borrowed” from itself.Ouch.
Nobody is buying US debt, so the Fed is monetizing it. There's no "there" there. It may as well be printing press money. This is economic policy? No. It is madness.
2 comments:
Doesn't that minimalize the damage? $1 billion of funny money becomes $300 million. Still sucks and may explain why the results are mixed (higher stock prices, but no jobs).
I've just watched an hour presentation on the coming currency crisis. It's coming, and probably there's nothing anybody can do about it. (except protect yourself, the government will be powerless to help anybody)
Of course, I've made suggestions. But nobody believes anything I say, so I guess they'll just have to suffer.
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