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Therefore, once we have ruled out the tale according to which US T-Bonds would be so safe and demanded that the whole world would be willing to buy them, even with a negative service, the only remaining explanation is that the Fed has been secretely buying (or having someone else buying) US T-Bonds for months.
In fact such a move is perfectly logical in a context of global insolvency. The US used to need to attract 80 percent of global savings to pay their deficits when the global economy was flourishing and their deficits were a lot smaller. Today that these deficits have increased by 400 percent at least (if not 1,000 percent by the end of 2009) (5) while the planet has lost (and is still losing) thousands of billion-worth of financial assets (6), Washington’s daily problem has become: how to borrow 500 percent of global savings in 2009 (we suppose here that available global savings are stable when in fact asset devaluation is probably higher than savings growth because of the crisis)?
Of course this is mission impossible, condemning the Dollar as mainstay currency (7), unless trying to cheat and disguise the money printing scheme into a global savings investment scheme; and/or, as anticipated already by LEAP/E2020, unless triggering a « world war of State bonds” that will compel the states involved to increase substantially the rates proposed for their bonds and to engage in a merciless process of overbidding to finance their deficits.
http://www.leap2020.eu/Towards-a-wor...ngs_a3291.html
In fact such a move is perfectly logical in a context of global insolvency. The US used to need to attract 80 percent of global savings to pay their deficits when the global economy was flourishing and their deficits were a lot smaller. Today that these deficits have increased by 400 percent at least (if not 1,000 percent by the end of 2009) (5) while the planet has lost (and is still losing) thousands of billion-worth of financial assets (6), Washington’s daily problem has become: how to borrow 500 percent of global savings in 2009 (we suppose here that available global savings are stable when in fact asset devaluation is probably higher than savings growth because of the crisis)?
Of course this is mission impossible, condemning the Dollar as mainstay currency (7), unless trying to cheat and disguise the money printing scheme into a global savings investment scheme; and/or, as anticipated already by LEAP/E2020, unless triggering a « world war of State bonds” that will compel the states involved to increase substantially the rates proposed for their bonds and to engage in a merciless process of overbidding to finance their deficits.
http://www.leap2020.eu/Towards-a-wor...ngs_a3291.html
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