http://online.wsj.com/article/SB10001424052748703427704575051192374232722.html?mod=googlenews_wsj
Geithner: U.S. Won't Lose Triple-A Bond Rating
Is it time to laugh Geithner off the stage. Again!
A few months ago when Geithner spoke in China, and he assured them that none of new fiscal policies being put in place in the United States would effect China, he was laughed off the stage.
Geithner who played stupid (or was that ignorant) of the AIG bailout by the Fed when Geithner was chairman is now trying to pretend he knows something about the economy (other than to cheat on his income tax return).
He is claiming that printing a few trillion extra dollars will have no effect on the economy and won't have any effect on the bond market.
Maybe I can explain to you what Moody's Investor Services is thinking, and what Geithner isn't thinking. In simple terms.
Let us assume there is an economy that is limited to 10 oranges and $10 in currency. Let us also assume that oranges sell for $1 each. What happens to the economy when an additional $10 of currency is created. You now have an economy with 10 oranges, and $20 in currency. So what used to cost $1 now costs $2. In this economy if you had loaned out $1 to a friend, and then the new currency was printed, you were repaid $1. However, it now cost $2 to buy an orange. You have lost value. You can no longer afford to buy an orange.
This is what the United States government is doing when it is printing and spending trillions of dollars that it doesn't have.
Wasn't life grand when you could believe any old lie the government chose to deliver to the public?
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