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At 08:11 AM 8/11/98 -0700, you wrote:
>There are real,
>tangible, "laws" of economics that cannot be denied. They may be
>suspended temporarily (i.e. in socialist and communist systems, or in
>our own deficit system) but not forever. Our national debt is
>growing, not shrinking. Just because we've managed, by fiscal
>trickery, to put off repaying it doesn't mean we won't have to (or
>won't be foreclosed upon).
Charles,
A little talked about aspect of the national debt growing larger is that the
expansion of deficits and debt is sometimes by design. There is nobody to
"foreclose" upon the U.S. debt, as long as the Gov. can find buyers for
Bonds-- and there is obviously no shortage of buyers as long as Bonds are
viewed as a safe refuge and people/funds have money to buy them. Viewed
from a different perspective, it's simply a gigantic transfer of wealth.
The return being paid today to Bond holders is obviously financed by selling
more Bonds-- and yes, it's a giant Ponzi scheme, but nobody seems to notice
or care-- as long as there are Bond buyers standing in line.
The massive deficits of the Reagan years (greater in 4 years than the total
from the entire 200+ year previous history of the Country) were by design --
not fiscal irresponsibility. As rates were dropping from the double-digit
Highs of the '70s, the puppeteers manipulating Reagan wanted to provide a
place for wealthy people to park money at 10% to 15% returns for the next 30
years.
Who wouldn't want to be receiving 12%+ today on money that was parked in
Bonds back in the '80s? -- Nobody I know.
Whether or not the scheme will eventually fold in on itself (or when),
nobody knows. Best to be nimble and camp out near the exit...
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