The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Showing posts with label monetizing. Show all posts
Showing posts with label monetizing. Show all posts

Friday, March 30, 2012

Fed monetizing US debt is increasing

With the government in full debt mode by its borrowing close to $150 billion a month just to cover current obligations, the Federal Reserve has been forced to go full bore in buying that debt, and monetizing government spending.

Last year the Fed purchased a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis.

This not only creates the false impression of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.

What about Japan and China? Aren’t they the major purchasers of U.S. debt? Not any more, notes Goodman. Foreign purchases of U.S. debt dropped to less than 2 percent  of GDP (Gross Domestic Product) from almost 6 percent just three years ago. And private sector investors — banks, money market and bond mutual funds, individuals and corporations — have cut their buying way back as well, to less than 1 percent of GDP, down from 6 percent. This serves to hide the fact that the government can’t find outside buyers willing to accept rates of return that are below the inflation rate (“negative interest”) given the precarious financial condition of the government. - New American


Congress last year did not have the stomach to halt raising the debt ceiling, and it appears that they will not keep the debt from crossing $16 trillion by the time of the election.  As foreign entities such as China and Japan deal with their own economic downturns, and Europe is requiring bailouts not buyouts just to survive, the Fed will have no choice but to keep monetizing US debt to stave off collapse and default by the world's largest creditor nation.