A quick economics lesson
From
Joseph Pereira@1:124/5016 to
All on Fri Aug 15 06:00:45 2025
How do governments get access to capital?
Officially, there are two ways:
1) Taxes
2) Debt
So, if taxes don't generate enough revenue, you have to take on more debt.
We're seeing this happen in the US right now.
However, last week the sale of US 30-year government bonds was a major flop. The bonds could only be sold by raising the interest rate. This fact is a red flag for the American economy. The economy desperately needs interest rates to come down.
We aren't seeing it in stock prices yet, but realize that the US government will soon have to create money out of thin air on a large scaleΓÇöin short, create a third way to get money. Due to the already high national debt, they can't afford high interest rates.
Quantitative Easing (QE) is a method they have used before. It worked then, but as a government, you're playing with fire if you keep creating money out of thin air. It's essentially cheating. The question is: how long will market participants continue to trust the dollar after that?
If confidence in the dollar disappears, not only the US but the entire world will have a problem.
.
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