The U.S. Treasury next month will go back to relying on the kindness of strangers like never before to purchase the nation’s burgeoning debts — and taxpayers may have to pay higher interest rates to attract enough foreign investors, analysts say.
Though a significant rise in interest rates could be toxic for a softening U.S. economy, the Federal Reserve has said it will end its program of purchasing $600 billion in U.S. Treasury bonds as planned on June 30. The Fed is estimated to have bought about 85 percent of Treasury’s securities offerings in the past eight months.
That leaves the Treasury, which is slated to sell near-record amounts of new debt of about $1.4 trillion this year, without its main suitor and recent source of support, and forces it back into the vagaries of global markets. Among the countries that will have to step forward to prevent a debilitating rise in interest rates are China, Japan and Saudi Arabia — and even hostile nations such as Iran and Venezuela with petrodollars to invest, according to one analysis.
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Though a significant rise in interest rates could be toxic for a softening U.S. economy, the Federal Reserve has said it will end its program of purchasing $600 billion in U.S. Treasury bonds as planned on June 30. The Fed is estimated to have bought about 85 percent of Treasury’s securities offerings in the past eight months.
That leaves the Treasury, which is slated to sell near-record amounts of new debt of about $1.4 trillion this year, without its main suitor and recent source of support, and forces it back into the vagaries of global markets. Among the countries that will have to step forward to prevent a debilitating rise in interest rates are China, Japan and Saudi Arabia — and even hostile nations such as Iran and Venezuela with petrodollars to invest, according to one analysis.
More Here..
Amerika is clearly in decline. We will be in the greatest depression by the end of 2012. By 2015, this nation will not be recognizable. FUBAR!
ReplyDeletewe are in it now, why do you think we are not?this recession thing is a joke, we have been in depression for over 2 years, and loser obama keeps saying how good the recovery is, there will be no recovery.
ReplyDeleteA person with a terminal illness like cancer will go through a period of denial right? Before the symptoms become un-ignorable. So the country goes through denial, no economic depression, and so on and eventually says apparently it IS an economic depression and so on...and so on...and you can see the future..it's not that hard to see where it's all headed. 38 special had that song 'flirtin with disaster'. Yarp.
ReplyDeleteIt's all obvious now.
Femur camps and maters, yawl.
Why do we need someone to "buy" that debt? It's fake funny money anyway, how about we just don't pay interest to someone else? We print up the money and use it directly?
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