With the resurgence of the market and the increasing level of government debt, the demand for t-bills had dropped during 2009, producing real concern that sales of government debt would not be adequate to cover the deficit spending of Washington’s fiscal nimrods. Yield rates were rising (as the demand dropped) and things were looking a bit grim. What to do, what to do?
The evil plot is hatched
With all the deficit spending going on in Washington, the national debt is skyrocketing exponentially as we add to the debt faster while barely keeping up with the interest payments. As the debt has increased and the AAA rating of the U.S. is in doubt, the question of whether the Treasury can continue to induce people (and other governments) to buy the U.S.’s debt is a major concern. If the country cannot continue to sell it’s debt, the whole house of cards (giant ponzi scheme) comes crashing down right? Now maybe bankrupting the country is in the overall plan (conspiracy theorists take note) but perhaps the timing isn’t quite right so how can Washington leverage a bit more time to prolong the inevitable???
With increased (forced) investment in annuities (of which insurance companies are the primary purveyor) and the resulting increase in bond sales (of which t-bonds are a large part), the big spenders in D.C. will have managed to finance a bit more fiscal irresponsibility.
That’s a nice way to boost the sale of government debt isn’t it?
But perhaps the smartest thing Obama did was to announce (quite forcefully with indignant, righteous anger) that banks needed to accept responsibility for their part of the financial crisis and pay through the nose. The net result of that announcement is fear. Fear that has driven investors to seek comparative safety from the presidents anti-business stance and move more assets into relatively safe investments. What would those relatively safe investments be???
Obama Spurs Sale of Government Debt
It’s All Part Of An Evil Plan
We're going to make 'em pay!!
With the resurgence of the market and the increasing level of government debt, the demand for t-bills had dropped during 2009, producing real concern that sales of government debt would not be adequate to cover the deficit spending of Washington’s fiscal nimrods. Yield rates were rising (as the demand dropped) and things were looking a bit grim. What to do, what to do?
The evil plot is hatched
With all the deficit spending going on in Washington, the national debt is skyrocketing exponentially as we add to the debt faster while barely keeping up with the interest payments. As the debt has increased and the AAA rating of the U.S. is in doubt, the question of whether the Treasury can continue to induce people (and other governments) to buy the U.S.’s debt is a major concern. If the country cannot continue to sell it’s debt, the whole house of cards (giant ponzi scheme) comes crashing down right? Now maybe bankrupting the country is in the overall plan (conspiracy theorists take note) but perhaps the timing isn’t quite right so how can Washington leverage a bit more time to prolong the inevitable???
One of President Obama’s ideas (not originating within his handsome head I’m sure) is to try and coerce 401k plans to purchase annuities (a real garbage investment) as a much larger portion of the overall investment portfolio. What makes up the predominant portion of many annuities? Bonds, of which treasury bonds are at least substantial portion *someone correct me if I’m wrong* No matter that most people are against being forced to invest in such crap, it just might not matter. That’s what happens when the government is given the authority to regulate how you invest your money. But, I digress.
With increased (forced) investment in annuities (of which insurance companies are the primary purveyor) and the resulting increase in bond sales (of which t-bonds are a large part), the big spenders in D.C. will have managed to finance a bit more fiscal irresponsibility.
That’s a nice way to boost the sale of government debt isn’t it?
But perhaps the smartest thing Obama did was to announce (quite forcefully with indignant, righteous anger) that banks needed to accept responsibility for their part of the financial crisis and pay through the nose. The net result of that announcement is fear. Fear that has driven investors to seek comparative safety from the presidents anti-business stance and move more assets into relatively safe investments. What would those relatively safe investments be???
Why treasury bills of course.
Create enough fear in conventional securities and you boost the sale of U.S. debt. Nicely done Mr. President!! which is why, as I said, I don’t think the idea originated with you.