Tuesday, March 13, 2012

They have reduced their purchases


Interest rates on Treasuries must increase. China, India, Russia and many other countries have admonished us on our profligacy. They have reduced their purchases and rearranged their holdings to the short-end of the curve. At the same time our funding requirements have soared. Official projections (probably understated) indicate these excessive funding needs will  be with us for at least a decade. This situation is not sustainable much longer. J. D. Steinhilber expands upon the issue.

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