Understand this: the socialist/macroeconomic European
experiment is imploding. Greece is still in a mess. Austria and France, if downgraded, could
represent the tip of the financial iceberg, promising serious problems
throughout Europe and, soon, the United States.
The stock market will take a hit,
according to experts, but the treasury
will celebrate in the [very] short term.
While financials in
this country are taking a hit, 10 year
T-Bills are down to 1.8%. Money is flooding into our treasury (from
Europe). What does this mean? Well, it means that billions of
dollars are flowing into our treasury (money that we can spend) on a promise to
pay back this money at a very low interest rate.
This scenario,
in the short term, is considered "good." The
problem is, of course, this is borrowed money - cheap as it is -
that will add to our nation's debt management costs in the future. Understand
that if we have to borrow money, cheap
T-bills are the way to go. . . . . . .
and we do have to borrow money.
The downgrade has not been confirmed but the news of the downgrade
is coming from French television.
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