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RTīs ,
a thing nobocdy talks about is the fact that the net debt added each year is in
economical terms used to create money. Thats how we get more money in the economy,
get expansion and eventually inflation. The big risk is that if the US starts to pay
down debt, because of the surplus, there will be no more money created, maybe even
soaked up. No more expansion of money and thus by all means of s/d, money would
become a commodity whichs price should rise. Rates would go up, it will be hard to
get credit etc. Thats were the real danger comes from.
Sounds strange, but the medium term effects of a budget surplus are the biggest
threat to stability in our days.
Keep an eye on it - Ulrich
Earl Adamy schrieb:
> There is ample evidence available in the weekly Fed Reports that foreign central
> banks have been liquidating US debt holdings at a steady rate - balances have
> dropped by 10% from April '97 peak of 650+ billion. This appears to be offset by
> the decline in government demand for borrowing. The situation should not be a
> problem until such time as the US dollar reverses course - the whole debt pile
> may then indeed be a bubble.
>
> Earl
>
> -----Original Message-----
> From: Tin Mervin Yeung <tinyeung@xxxxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: Monday, July 06, 1998 1:03 PM
> Subject: foreign holdings of US govt securities
>
> >Hi, RT's,
> >
> >Please help me find data to refute the following chart:
> >http://www.lfcity.com/chart11.htm
> >
> >If this chart is true, then we are not going to have a rising stock
> >market (+30% annually) for the next 50 years.
> >
> >Mervin
> >
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