Argentina Tops List Of 20 Signs Of Global Economic Meltdown

[bigbadwolf]

This is blatantly false information. To begin with, the Federal Reserve is actually a profitable institution that turns over most of those profits to the US Treasury on an annual basis. Second, the Federal Reserve does not print any money ever. The "$85 billion monthly fiscal shortfall" you are alleging has nothing to do with the Federal Reserve and is the US federal government's budget deficit; this deficit is not funded by "printing money" as you allege. The US Treasury auctions off securities (T-bills, T-notes, T-bonds) and the proceeds of these auctions are what funds the government's fiscal deficit.

And who do you think buys those T-bills these days? China? Few foreigners wants to buy new US debt and those holding it are trying to figure out how to unload it on some other poor sucker. The US Treasury "auctions" off those securities but since few are dumb enough to bid for them, the US Treasury prints money and buys much (most?) of them itself. In effect the US government is printing money to cover its shortfall.

There's more here (or in numerous other places):

http://www.firstpost.com/economy/us-debt-rises-why-the-great-american-ponzi-scheme-might-just-keep-running-1179989.html

 

[nicoenarg]

If The New York Times is to be believed, Argentina is on the brink
I'm wondering if that's a little dramatic.

I don't know about dramatic. It describes normal life around here. But yes, the title is dramatic. The article should have been titled "Argentina"

 

[John.St]

I don't know about dramatic. It describes normal life around here. But yes, the title is dramatic. The article should have been titled "Argentina"

I would suggest "Argentina, business as usual".

 

[jackbower]

And who do you think buys those T-bills these days? China? Few foreigners wants to buy new US debt and those holding it are trying to figure out how to unload it on some other poor sucker. The US Treasury "auctions" off those securities but since few are dumb enough to bid for them, the US Treasury prints money and buys much (most?) of them itself. In effect the US government is printing money to cover its shortfall.

There's more here (or in numerous other places):

http://www.firstpost...ng-1179989.html

debt monetization. But let's called it something else.

 

[bigbadwolf]

debt monetization. But let's call it something else.

Absolutely. But people are getting jittery. The US government is getting jittery. And circumstantial evidence suggests it's been rigging the price of gold to stop a stampede out of the dollar.

 

[sleazemerchant]

And who do you think buys those T-bills these days? China? Few foreigners wants to buy new US debt and those holding it are trying to figure out how to unload it on some other poor sucker. The US Treasury "auctions" off those securities but since few are dumb enough to bid for them, the US Treasury prints money and buys much (most?) of them itself. In effect the US government is printing money to cover its shortfall.

There's more here (or in numerous other places):

http://www.firstpost...ng-1179989.html

Wrong again. The US Treasury does not auction off securities to themselves. Foreign governments/investors (this year it will be primarily Japan, with a 200 basis point spread between Japanese 10 year notes and comparable T-notes, and an appreciating USD v. Yen) and primary broker/dealers (big investment banks) are the main buyers. The Federal Reserve does buy US Treasury securities (along with toxic MBS products) to increase liquidity (thus artificially holding down interest rates) as part of their QE program.

 

[bigbadwolf]

Wrong again. The US Treasury does not auction off securities to themselves. Foreign governments/investors (this year it will be primarily Japan, with a 200 basis point spread between Japanese 10 year notes and comparable T-notes, and an appreciating USD v. Yen) and primary broker/dealers (big investment banks) are the main buyers. The Federal Reserve does buy US Treasury securities (along with toxic MBS products) to increase liquidity (thus artificially holding down interest rates) as part of their QE program.

So I'm "wrong" but you concede that the Fed does buy US Treasuries? Where's my error, then?

 

[Page8383]

I would suggest "Argentina, business as usual".

I think this is the problem. The apathy for this type of thing amongst Argentines is far too tolerant. They are excellent at improvising and adapting to these crises, but the root of the problem remains untreated. These circumstances should been seen as extraordinary, not ordinary. For this to be considered "business as usual" is unacceptable imo.

It is the cause and effect that makes up the problem. Far too much focus is placed on the effect, whilst the cause remains neglected.

Easier said than done. But it's a start.

 

[jackbower]

So I'm "wrong" but you concede that the Fed does buy US Treasuries? Where's my error, then?

no error whatsoever. It appears like he's trying to argue semantics.

 

[bigbadwolf]

no error whatsoever. It appears like he's trying to argue semantics.

Heck, that $450bn Fed purchase of US Treasuries is just providing a bit of liquidity to the market.