< HOME  Monday, November 14, 2005

They're Looting The Nation!

At the risk of sounding alarmist, I direct your attention to the full text of what looks like the beginning of the end.

But, since no one likes to read Bloomberg, I’ve included the essential bits of the article below. And because much of it is [no doubt, deliberately] confusing financial jargon, my translation follows each bit. If you don't trust me, read it yourself.

I welcome any objections to my analysis.
FOREIGN INVESTORS LOSE APPETITE FOR TREASURIES AS DEFICIT RISES Nov. 14 (Bloomberg)

The U.S. government is growing more dependent on investors from abroad [mortgaging more of the nation to pay interest on our debts] just as their appetite for Treasury securities is waning [it's too risky].

Overseas investors… own half of all U.S. government debt [we work to enrich them], [and] bought 14 percent of …10-year notes auctioned this year… [we’re auctioned off to the highest bidder]

A drop in demand may extend the slump that pushed Treasury yields to the highest this year, raising the government's borrowing costs to finance a $319 billion deficit.
RED ALERT detailed translation necessary!!! Feds increase interest rates (a.k.a. YIELDS) to stimulate demand for treasury bonds, which in turn raises the government's borrowing costs (INTEREST PAID) on its debts! HOLY COW!!! they're accelerating our demise!!! It's like a dog chasing its own tail!!!
The U.S. will borrow a record $171 billion … to help pay for relief efforts after Hurricanes Katrina and Rita [following death and destruction, vultures circle for their share of the carcass]

***

Investors ``are cautious about buying too aggressively right now with yields rising so quickly…'' ["let's wait until they're so desperate, they'll pay any percent interest we ask"]

***

The yield… moves inversely to the note's price [they pay less to screw us more] and is used to help determine corporate and consumer borrowing costs, [how desperate we’ll be to borrow more]

Foreign Participation ...

[A] larger group that includes U.S. institutional investors, foreign central banks and overseas investors, bought 34.9 percent of the debt sold…down from 47.4 percent …a year earlier. [half of the country belongs to them]
`
`Foreign buying … is waning,'' [collapse is imminent] … ``This would obviously put upward pressure on yields. [please buy! we’ll promise you their grandchildren]

The Treasury will always be able to finance the budget deficit. [printing is easy] The real question is at what cost.'' [how about their great, great, great grandchildren?]

***

`Haunting' Deficit

Overseas investors owned…half the … tradable Treasuries ... [the other half of the country belongs to them]

[F]oreign investors ...[keep] U.S. yields in check as the budget deficit ballooned to a record [height]...[if it weren’t for foreign vultures, domestic vultures would have devoured us by now]

"You can't build in these constant deficits without having them come back to haunt you…'' [we’re screwed]

Japan, the largest foreign owner of Treasuries, cut its holdings of the securities this year [by over $15 billion]… [cutting its losses]

***

`Better Places'

There's little incentive to invest in U.S. debt with inflation accelerating and the Fed forecast ...to keep raising rates into 2006... [when there are too many prostitutes, a prostitute must do more tricks to earn the same dollar]

***

"The Fed has really wanted to get ahead of inflation and stay ahead of it. You're going to see higher yields."
WHAT HORSECRAP!!! You CANNOT increase interest rates in an economy saddled with debt without causing INFLATION!!!

If a dog CANNOT reach his tail, does it matter how fast he chases it?!!
Quigley … said he prefers German government debt to Treasuries even with yields on U.S. 10-year notes exceeding bunds by about the most in six years. [the U.S. is overextended, it simply has nothing of value left to offer]

***

`Good Value'

Treasury yields are the highest among the Group of Seven nations, which may help temper sales by foreign investors. [at these insane profits—let’s milk it for all its worth]

"Treasuries are pretty good value,'' [how can you resist profits at NO RISK?] …"I would recommend getting in at these levels.'' [it won’t last!]

***

Gains in the [value of the dollar] make it more expensive for foreign investors to finance their purchases of U.S. debt.
MAJOR CONFLICT OF INTEREST:the more value we get for our hard earned money the less profitable it is for creditors to rape us—so the Fed increases interest rates to entice creditors to rape us!!!
"Japanese accounts [are] shunning dollar assets," . . . "Foreign investors look at purchasing U.S. assets as two pieces: buying dollars and then buying the securities. If one of these pieces gets too rich, then the transaction becomes less attractive"
HOLY COW!!! They’ll only buy our bonds and charge us interest if they can buy the dollars we need to pay the interest! It's like putting money in one pocket, then taking it out of two different pockets at a faster pace!

3 Comments:

At Sunday, November 20, 2005, Blogger efsaturn said...

So say if the US chooses/demands a no interest banking system; what about these foreign investors? They want their money.

What if a small country indebted to the World Bank choses a social lending system and refuses to pay the world bank? Will the World Bank or UN send in UN Troops to collect the funds?

 
At Monday, November 21, 2005, Blogger qrswave said...

Thanks for the comment, efsaturn.

First question: I'm not sure what foreign, or domestic, investors would do. Clearly, in order to avoid conflict, whatever has already been collected stays with them. Then some heavy duty negotiations and planning takes place. Of course, we want to avoid conflict. And, this is possible if everyone sits down with a calm head and realizes that the alternative is really ugly.

The thing to remember is that money is only good among people who accept the currency and are willing to work for it. Otherwise, it's worthless. So, it's in the interest of those who are owed the money to strike a deal.

Argentina recently defaulted on its debts and paid back only a portion of it and the world is still turning. You should read about it online.

As to your second hypothetical, war is always an option for those who control weapons. But, they can forget about getting paid afterwards. And, if enough people around the world learn the truth, my guess is that it won't happen.

They would have nothing to gain and everything to lose.

 
At Monday, November 28, 2005, Anonymous gritzo1 said...

I just found your website and have been reading your comments. They are great! Keep up the good work!!!

 

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