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you mean the feds, the very same fed we're discussing? Yeah, I know.. thats why it entered into the discussion..
But you're wrong. The fed sets rates in response to the markets, which is a world wide demand. Do you really think the fed will keep the interest rates at 1%, if in China they are paying 10%? Why would anyone bank any money here if thats true?
Whoo boy!
Back up!
Show me where I can put my measly $1M and get 10% on a AAA Yuan investment, and you can keep 90% of my gains!
And I mean today, not in a generation when I can just call my own damn broker!
Actually the rates are set at the Treasury and there are certainly market considerations. But the Fed is strong enough to effect change on those rates, as well as setting interbank and system rates.
So tell me why it would matter if China was paying 10%?
Show me where I can put my measly $1M and get 10% on a AAA Yuan investment, and you can keep 90% of my gains!
And I mean today, not in a generation when I can just call my own damn broker!
Actually the rates are set at the Treasury and there are certainly market considerations. But the Fed is strong enough to effect change on those rates, as well as setting interbank and system rates.
So tell me why it would matter if China was paying 10%?
I think most people are smart enough to know I was exagerating for the sake of exagerating..
Which leads me back to the question, what happens when the interest rates climb, where exactly do you think we'll get this $1T a year to pay interest alone on the $20+T debt we'll soon have?
I think most people are smart enough to know I was exagerating for the sake of exagerating..
Which leads me back to the question, what happens when the interest rates climb, where exactly do you think we'll get this $1T a year to pay interest alone on the $20+T debt we'll soon have?
Our Debt rose 500% from 1980-1996, and it might rise a bunch in the next 16 years. But nothing functionally changes as our economy and the world enlarges.
Paying higher rates on more debt is not all bad for gosh sakes! First off we are the creditors for most of that debt. And higher rates mean a stronger USD. Fixed income folks do better, Money Markets and CD's pay better. There will be more Tax revenue from interest income, and more Tax from a larger and richer economy and population. More debt means the rest of the world is still affixed to the USD.
Our Debt rose 500% from 1980-1996, and it might rise a bunch in the next 16 years. But nothing functionally changes as our economy and the world enlarges.
Paying higher rates on more debt is not all bad for gosh sakes! First off we are the creditors for most of that debt. And higher rates mean a stronger USD. Fixed income folks do better, Money Markets and CD's pay better. There will be more Tax revenue from interest income, and more Tax from a larger and richer economy and population. More debt means the rest of the world is still affixed to the USD.
You didnt answer the question I posed, you only justified its existance..
A combination of taxing and new money creation as always.
new taxes, so not only do we have to deal with the disasterous monetary policy of the current President, but future presidents will have to deal with it as well, thus increasing taxes, thus reducing any future growth..
its why the stimulus, was expected to cost over $3T, even though it was $1T in spending.. and failed..
I think most people are smart enough to know I was exagerating for the sake of exagerating..
Which leads me back to the question, what happens when the interest rates climb, where exactly do you think we'll get this $1T a year to pay interest alone on the $20+T debt we'll soon have?
As Berannke and others have poninted out they don't know as we have never been here before.Remember that at some point the FED is going to sell those purchases its been making monthly. Not really any plan as to when or method to do this or what they see it effects n markets involved. The purchases are treasury and mortgage bonds.
new taxes, so not only do we have to deal with the disasterous monetary policy of the current President, but future presidents will have to deal with it as well, thus increasing taxes, thus reducing any future growth..
its why the stimulus, was expected to cost over $3T, even though it was $1T in spending.. and failed..
As I previously stated - "Our Debt rose 500% from 1980-1996" - And I pay no more tax today than in 1981.
All Presidents have to deal with previous National Debt because it is ever accumulating and never will be paid off. This is our money and this is our power.
$1T of spending = $1T of debt. $3T of cost = $3T of debt. You're saying we should have spent more than we did?
As I previously stated - "Our Debt rose 500% from 1980-1996" - And I pay no more tax today than in 1981.
All Presidents have to deal with previous National Debt because it is ever accumulating and never will be paid off. This is our money and this is our power.
$1T of spending = $1T of debt. $3T of cost = $3T of debt. You're saying we should have spent more than we did?
As usual, the no debt is enough crowd, doesnt comprehend that $1T in spending will actually result in $3.27 in debt..
So tell me, if we spent $3T, what would it have cost us
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you mean the feds, the very same fed we're discussing? Yeah, I know.. thats why it entered into the discussion.. 
