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provfivetine -> RE: Jim Rogers: US nearing worse financial crisis (6/9/2011 11:46:05 AM)
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quote:
ORIGINAL: Musicmystery
If you would READ what I posted, you wouldn't have these questions. You're just churning to "win" an argument you don't understand.
Debt increased in the last three years, yes. It also increased over the last twelve. It did not quadruple.
The Fed has nothing whatsoever to do with debt. Nada. Zip. That's the Treasury (and Congress). Your money supply graph has nothing to do with debt. Nada. Zip. And the Fed can "unwind" at any point, through selling securities in its portfolio or by raising interest rates (which would curb inflation).
Who cares what one purchaser has decided? Look at some data before you make up your conclusions. $9.7 trillion of the $14.3 trillion in debt is held in U.S. hands.
http://www.treasurydirect.gov/NP/BPDLogin?application=np
http://seekingalpha.com/article/258341-who-holds-the-u-s-national-debt
And while those are big numbers, its in a country with a $15 trillion GDP and $54 trillion in wealth.
This is laughable. Rogers is speaking in euphemisms. You're taking what he says literally. He's saying that it's quadrupled because it's increased tremendously. Has it not?
The FED has nothing to do with debt? What a gem. Who do you think is monetizing all of the debt? Who do you think is making all of this borrowing possible? If the FED stopped buying treasuries then this entire party comes crashing to an end.
The money supply graph has everything to do with debt because it's all being monetized.. If it wasn't being monetized then you might have a point, but it is. You still haven't addressed this point.
Who is the FED going to sell the treasuries to? The FED is the biggest buyer. The other big buyer, China has already divested 97% of its holdings.
The FED can raise rates, but if it does then the economy is going to be pushed back into recession/depression. That's why they haven't done this yet. Uncle Ben is trapped. If he keeps "stimulating" then we get mass inflation and if he raises rates we're back in another financial crisis. If it was so easy as to simply raise rates, as you've indicated, then it would have already happened.
And you don't care what Bill Gross, the worlds largest private treasury buyer, has decided? He's abandoning treasuries because they are a lost cause. Do you know more about the treasury bond market than he does?
Of that 9.7 trillion, most is held by the FED.. That's the entire point. The FED is the biggest buyer of treasuries cause no one else will buy them. Those links you've provided just prove my point.
And that 14.2 trillion is just the tip of the iceberg. See my other post and read that US today article that I linked to. That 14.2 figure doesn't include the 60+ trillion (more than the world GDP) debt that includes the contingency liabilities.
To suggest that I don't understand this and then to make the assertions that you made is a sign of profound intellectual confusion.
You should take a job where you can defend the central banking establishment elite, because it seems that you're into that.
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