The ultimate bubble: Treasuries (T) bubble coming?

  • Thread starter Thread starter zankaon
  • Start date Start date
  • Tags Tags
    Bubble
Click For Summary
SUMMARY

The discussion centers on the potential emergence of a treasury bubble, driven by decreased foreign purchases of Fannie Mae and Freddie Mac securities. Participants speculate whether this trend indicates a future inability for the U.S. government to borrow effectively, potentially leading to a dual currency scenario similar to Europe. Concerns are raised about the implications of a U.S. budget deficit under $1 trillion and the effectiveness of fiscal conservative measures in reassuring both domestic and foreign creditors. The conversation concludes with a consensus that the Federal Reserve's ongoing purchases of treasuries will likely contribute to inflationary pressures.

PREREQUISITES
  • Understanding of U.S. Treasury securities
  • Familiarity with fiscal policy and budget deficits
  • Knowledge of foreign investment in U.S. debt instruments
  • Awareness of inflationary impacts from Federal Reserve actions
NEXT STEPS
  • Research the implications of decreased foreign investment in U.S. Treasuries
  • Explore the concept of dual currencies and its historical context
  • Investigate the relationship between budget deficits and inflation
  • Learn about the Federal Reserve's role in treasury purchases and monetary policy
USEFUL FOR

Economists, financial analysts, policymakers, and investors interested in U.S. fiscal policy and its impact on the economy.

zankaon
Messages
163
Reaction score
0
Is the ultimate bubble, the treasury bubble coming? Was foreigners' markedly decreased purchase of Fannie Mae and Freddie Mac securities, a harbinger of the future for treasuries? Would the resultant lack of government ability to borrow be what is required to deleverage politicians? Possible dual currencies here, like for Europe, since there is greater faith in ECB than our Fed? Possible U.S. borrowing in eurodollar and yen denomination securities overseas? Is this the worse case scenario? Would a U.S. budget deficit less than $1 trillion, and other fiscal conservative measures, send the right message to creditors, both domestic and foreign? Or is it the same old spend and spend (code word for debt); what did the vote on bail out indicate? The private sector is deleveraging; but not the public sector. A generation (25 yrs) for the excesses of the last 25 yrs, to be deleveraged? Good luck to all of us
 
Physics news on Phys.org
The federal reserve will buy them. They already do. And we will have more inflation.
 

Similar threads

News Is The Global Economic Crisis Worse Than Expected?
  • · Replies 29 ·
Replies
29
Views
5K
News Bush Administration: My Indictment
  • · Replies 3 ·
Replies
3
Views
4K