Financial News

Rogers Says Roubini Is Wrong on Bubbles as Gold, Stocks Rally
A great piece by famed invester Jim Rogers on Bubbles and Gold.

Failure written into ‘too big’ policy
Article by Henry C K Liu of Asia Times and challenges the wisdom of too big to fail and the resulting effects.

Dollar Overwhelms Central Banks From Brazil to Korea

Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle.

Wave of Debt Payments Facing U.S. Government

But that happy situation, aided by ultralow interest rates, may not last much longer.

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means.

Audit the Fed Bill: Attempted Saturday Night Massacre Underway

So get this, sports fans: the day (or maybe two max) before the
so-called Audit the Fed bill (a bipartisan initiative to increase
transparency) has a torpedo shot at it by a member of the House
Financial Services committee, one Mel Watt of North Carolina. Of
course, his amendment
professes to increase transparence too, but in fact does nothing of the
kind, and in fact would reduce the GAO’s audit powers over the Fed.

I’ll admit I’m a bit of a newbie at these matters, but it strains
credulity to think Watt came up with this Trojan horse on his own. I’ll
bet the Fed provided the language for this stealth operation.

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