Comments on: Financing the Stimulus May be a Massive Challenge, Treasury Market Shows

By: Obama Stimulus May End Up Hurting the Economy it Was Supposed to Have Helped

Obama Stimulus May End Up Hurting the Economy it Was Supposed to Have Helped — Fri, 29 May 2009 10:01:08 +0000

[...] long been a worry, and now it’s beginning to seem [...]

By: As Resurgent U.S. Banks Shift Into Profit Mode, Hitch a Ride With These Two for Gangbuster Returns

Wed, 18 Mar 2009 10:30:51 +0000

[...] money market rates down to nearly zero, but has had much less effect on long-term bond rates, which have shown a tendency to rise, both because of the escalating budget deficit and because of the possibility of recurrent [...]

By: Dolores Fleming

Dolores Fleming — Mon, 16 Mar 2009 15:19:00 +0000

The stimulus will only put us deeper in debt.Obama had said he wanted to distribute the wealth.He will be the new Robin Hood.The reason he wants all the black people to get rich and over power the white people.Obama is not a naturalized citezen of this country.He as born in Magnadasha in kenya.That wife of his Michelle sitting in the White house after saaying in two of her speeches that all her adult life she was not proud of AMERICA makes my blood boil.President Teddy Roosevelt has said that to be an American you have no other name before you.My grand parents game here from germany and went threw hell at Ellis island and suffered days waiting to get into this country. The Obamas claim they are African American.I say send them back to Africa.

By: William Patalon III

William Patalon III — Fri, 27 Feb 2009 00:04:00 +0000

Once again I think these posts demonstrate that Money Morning’s readers are among the best-informed investors you’ll find anywhere today. That’s a big part of why this job is so gratifying for those of us who keep MM going.
William Patalon III
Executive Editor

By: David

David — Mon, 09 Feb 2009 19:11:45 +0000

Scary stuff but right on the mark IMO.
Some excellent analysis from Steve Keen ( Australian not Austrian) economist.
http://www.nakedcapitalism.com/2009/02/steve-keen-roving-cavaliers-of-credit.html

Tackles the way debt is created and consequences of central bank montisation.
Cheers,
David.

By: Kip Walls

Kip Walls — Mon, 09 Feb 2009 15:10:04 +0000

I listened to Volcker’s presentation last week several times and found it seemed to blame the changes made to the US system since 1980. While he did not blame Congress or the Administrations, he blamed changes like allowing huge banks to be created, allowing non banks to own bank holding companies, the consolidations of banks, the shifting of banks to securities markets and vice versa, the globalization of debt, living beyond our means on foreign loans, and etc. All these things were done by political policy and changes in laws allowing them to happen. In my own studies it seems that Greenspan Congress warned of problems before he retired. Ravi Batra likewise warned of the problems as did other respectable economists like Schilling. The cautions were made but Congress and White House blatantly ignored them! It is truly bizzarre the negligence on the part of policy makers! They certainly do not deserve lifetime wages and benefits!

By: Phil Steinschneider

Phil Steinschneider — Mon, 09 Feb 2009 12:43:32 +0000

What a great article. Mr. Hutchinson tells it like it is without mincing words.

I grudgingly have to admit that Keynesianism can potentially work, but only when a government is borrowing from its people; and those people patriotically step up to the plate and lend. This, of course, illustrates that the people of such a nation are fiscally conscientious and creditworthy themselves. A government is generally a reflection of its citizens.

What we have today, however, is a government by the borrowers, for the borrowers, and of the borrowers. That is, the generation that borrowed us into this mess, is now trying to borrow us out of it. Debt is not a dirty word to them, as they grew up maxing out their credit cards and barely keeping their heads above water financially. Now those same people are running the US Government.

Since America is essentially broke, we’ll need to borrow over 50% of what we “need” to get us out of the mess from foreign investors. But those potential buyers of debt have problems of their own due to the disease we gave them. And they now need the funds they would have invested in the US economy to fix their own problems.

Even though it would behoove the large foreign holders of US debt to continue supporting the “debt machine” that we’ve become, in all likelihood this will no longer be possible.

With trade surpluses disappearing in our creditor nations, they will cease to have the wherewithal to prop-up what was once their principle customer. They will have no choice but to stop funding our borrowing. That is when the treasuries bubble will burst, the government will be forced to monetize the debt, and the dollar will collapse. Inflation and high interest rates will inevitably follow.

By: Busy Man's Workout

Busy Man's Workout — Fri, 06 Feb 2009 18:45:19 +0000

I agree with a lot of the points made in this article.

We are vastly underestimating what it is going to take to revamp our financial system.

By: Madeline Kimbrell

Madeline Kimbrell — Fri, 06 Feb 2009 16:59:53 +0000

I do not believe the stimulus package will work. I do believe however that Pres. Obama will get his way and we will be deeper in the hole.