| TIC Data Points to Bailout Struggles |
Bailouts and Economic Stimulus Packages are Expensive One thing the financial crisis we are in has taught us is that government bailouts and economic stimulus packages are expensive. We used to think that numbers in the billions were expensive, but now we're talking about numbers in the trillions. So where does all of this money come from anyway? It comes from the U.S. Treasury.  Where does the U.S. Treasury get it, you ask? It gets it by selling Treasury Securities—like Treasury Bills, Treasury Notes and Treasury Bonds. To whom does the Treasury sell its Treasury Securities? That's where the TIC Data come in. The problem is, in order for the Treasury to be able to sell its Treasury Securities, it has to find people to buy them. According to past Treasury International Capital (TIC) Data, the principle buyers of Treasury Securities have been foreign governments—like those in Japan and China. Unfortunately, it appears that foreign governments and other foreign buyers are becoming less and less interested in funding the U.S. Government by buying U.S. Treasuries. Higher Interest Rates If the TIC Data [click here to see the Latest TIC Data from the Treasury] continue to show that foreign investors are unwilling to buy U.S. Treasuries, the Treasury may be forced to increase the interest rates it is willing to pay on its Treasuries to entice investors to buy them. Of course, higher interest rates are not exactly condusive with economic recovery, which could potentially put the Treasury and the Fed in quite a bind. Keep your eye on the TIC Data to see if the Government is going to be able to fund its bailout plans.
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3.25 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved." |
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