AFXFin,
Yes it does come off as a lot of high sounding words as if they had the power to control future events.
Yes it does come off as a lot of high sounding words as if they had the power to control future events.
EurAnalysis Kindergarten 24 replies
DislikedHmmm So if that happens I would have to start a new thread.
Probably call it "OnYourMarks"Ignored
DislikedI wouldn't bet on it. China is the biggest FOREIGN holder of U.S. bonds not the biggest holder in total. There's a big difference. China actually doesn't own as much of those bonds as is widely believed. (about 7% if my memory isn't cheating me)
It's the FED's action that is keeping the bond market up. But yeah, as far as the yields go, sooner or later U.S. is gonna face the same shit europe does and there's nothing China or anybody can do anything about itIgnored
Dislikedyou are wrong.
the difference between Europe and USA is that Europe actually borrows money through bond action.
Bond auctions will NEVER fail in the US, the GOV does not NEED BONDS TO BORROW. US never BORROWS.
look into modern monetary theory
the Fed use bonds to soak up liquidity from the banking sector, and keep the targeted reserve ratioIgnored
DislikedHi Lumesh,
A change in sentiment is all it took to cause a bond failure for Germany last week.
Inflation fears drive nerves to the breaking point and since Bernanke and company have zero credibility when it comes to restraining money printing.
The Fed has nothing they can fall back upon to, when a large customer decides to not shop at the Treasury store.
Markets go along merrily until one moment of critical mass is reached. All at once everyone is headed for the same exit door.
A decent spike in US interest rates has not happened,...Ignored
Dislikedi am not sure i understand what you mean...
Why is U.S. in debt then if it never borrows ? Why does it have a bond market if it never borrows ?
I must be missing something....Ignored
DislikedLumesh,
These markets are enough to drive any one Mad.
I don't want to fill up any more of the thread so will sit on my hands for awhile.Ignored
Dislikedthe US has a fiat currency correct? the Treasury department and the Fed both act in unison.
the US never BORROWS money in the conventional sense, it simply creates it, as well as it doesn't collect taxes for revenue, simply as debits to the system.
when the Gold window was closed, it broke any links between our paper currency and its intrinsic value or tangible backing.
the way money is created in this fractional reserve banking system is basically in 2 forms, high power money and lateral money.
high power money is from the government....Ignored
DislikedPK,
Overbought oversold indicators are always a tough one to interpret.
As something in a trend will have an occilator stuck at one side of the chart for an extended time period.
how many times has it happened that an oversold condition just gets more oversold as the market trends down.
Are you making a call that the Euro/USD is in a range, thus at an extreme, or do you think we are in a trend?
Probably the hardest question to answer of all.
ThanxIgnored
Dislikedokay, i thought you'd come up with smth like that...but, in reality, please think about what you just said:
"the US never BORROWS money in the conventional sense, it simply creates it, as well as it doesn't collect taxes for revenue, simply as debits to the system. Now the public and foreign banks and govt are welcome to participate in the bond auction, but we do not need their money to borrow, we simply create dollars from thin air."
i'm just asking you this one question:
what is that you think has kept U.S. from becoming Zimbabwe...Ignored
Dislikedreserve currency status
we export inflation, you need proof. look at world commodity prices.
if we did not have that privilege of the reserve currency of the world we would not distribute inflation globally we would eat it, via domestic hyper inflationIgnored
Dislikednot sure i understand your question?
why has japan been in a deflationary period? or why the yen has appreciated and the BOJ continues to push usd/jpy price up when pressure falls on that 76.00 level?Ignored