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and learns if from jim willy... who learned it from itulip... but whatever.
The only place foreigners are "still buying" is in the Treasury market, and one wonders: for how much longer, and how much of that is really foreign buying?
Not that it matters. This debt is being rejected because foreigners have no faith in the future of its value. It is not just the risk of default any more - it is also the risk of currency translation going "the wrong way" to an extreme degree, potentially destroying the buyer's purchasing power even if a formal default does not occur.
This is the wall that I have written about for more than two years [mm... liar... you said the fed was never, never, never going to use qe, print money. what a liar... worse than jim cramer], and the risk of Bernanke's so-called "smarts" when it comes to "quantitative easing", otherwise known as "monetization" (which Bernanke said, under oath, he wouldn't do - but both was and is.) [mm... no shit, sherlock... he's a liar, just like you]
Here's the issue, in a nutshell: Bernanke surmises that he wants long-term (and short-term) interest rates low to "spur borrowing" and thus attempt to kick the economy back into growth. This in turn "mandates" an extraordinarily loose monetary policy.
The math says this is idiotic: We are in this mess because of too loose a monetary policy for too long, which in turn engendered too much debt in the system for the economy's productive output. The economy got drunk on too much credit; you can't fix it with a bottle of whiskey.
In turn the market believes this policy is dangerous on two accounts: The debt itself needs to yield more as a consequence of actual default risk and the dollar has a risk of rapid, disorderly decline due to money printing which is exactly the same from a foreigner's point of view of purchasing power as a default.
[mm... ding, ding, ding. after all of the heated arguments ej's had with karl on his site where karl calls ej stupid, now he comes out and makes the exact same argument! what a moron!]
http://market-ticker.denninger.net/a...ead-Ahead.html
woo hoo! only took him 10 yrs to catch on!
The only place foreigners are "still buying" is in the Treasury market, and one wonders: for how much longer, and how much of that is really foreign buying?
Not that it matters. This debt is being rejected because foreigners have no faith in the future of its value. It is not just the risk of default any more - it is also the risk of currency translation going "the wrong way" to an extreme degree, potentially destroying the buyer's purchasing power even if a formal default does not occur.
This is the wall that I have written about for more than two years [mm... liar... you said the fed was never, never, never going to use qe, print money. what a liar... worse than jim cramer], and the risk of Bernanke's so-called "smarts" when it comes to "quantitative easing", otherwise known as "monetization" (which Bernanke said, under oath, he wouldn't do - but both was and is.) [mm... no shit, sherlock... he's a liar, just like you]
Here's the issue, in a nutshell: Bernanke surmises that he wants long-term (and short-term) interest rates low to "spur borrowing" and thus attempt to kick the economy back into growth. This in turn "mandates" an extraordinarily loose monetary policy.
The math says this is idiotic: We are in this mess because of too loose a monetary policy for too long, which in turn engendered too much debt in the system for the economy's productive output. The economy got drunk on too much credit; you can't fix it with a bottle of whiskey.
In turn the market believes this policy is dangerous on two accounts: The debt itself needs to yield more as a consequence of actual default risk and the dollar has a risk of rapid, disorderly decline due to money printing which is exactly the same from a foreigner's point of view of purchasing power as a default.
[mm... ding, ding, ding. after all of the heated arguments ej's had with karl on his site where karl calls ej stupid, now he comes out and makes the exact same argument! what a moron!]
http://market-ticker.denninger.net/a...ead-Ahead.html
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