tag:blogger.com,1999:blog-4185740361476149540.post3970717120663234415..comments2024-02-15T00:40:37.565-08:00Comments on The Biz of Life: US Government Pays Higher Interest Rates than Some Corporations as AAA Rating is Put at RiskThe Grouchhttp://www.blogger.com/profile/16355057736314451831noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4185740361476149540.post-34605679565585139582010-03-24T10:52:22.830-07:002010-03-24T10:52:22.830-07:00In 2003, Paul Krugman wrote:
How will the train w...In 2003, Paul Krugman wrote:<br /><br />How will the train wreck play itself out?...my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar. It won't happen right away....But unless we slide into Japanese-style deflation, there are much higher interest rates in our future. <br /><br />I think that the main thing keeping long-term interest rates low right now is cognitive dissonance. Even though the business community is starting to get scared — the ultra-establishment Committee for Economic Development now warns that "a fiscal crisis threatens our future standard of living" — investors still can't believe that the leaders of the United States are acting like the rulers of a banana republic. But I've done the math, and reached my own conclusions.<br /><br /><br />The situation hasn't gotten any better.The Grouchhttps://www.blogger.com/profile/16355057736314451831noreply@blogger.comtag:blogger.com,1999:blog-4185740361476149540.post-57717895326316341802010-03-23T04:39:57.646-07:002010-03-23T04:39:57.646-07:00This falls in the bucket with those things we thou...This falls in the bucket with those things we thought we'd never see. Can we now say "we've seen it all"? <br />Perhaps not. If we continue down the same road, one day Treasuries will be junk bonds.<br />The fact that the government can print money whenever they feel like it is, in my view, the problem.Robert Wasilewskihttps://www.blogger.com/profile/04536814650758511673noreply@blogger.com