MERCATO LIBERO

Una chicca per Natale

Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.

Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."

What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.

The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.

So... where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP.

Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry's Investment Advisory. Coincidentally, the New York Times repeated my warnings – nearly word for word – a few weeks ago. They didn't mention Greenspan-Guidotti, however... It's a real secret of international speculators.

www.dailywealth.com


punto di vista interessante

Il Folletto

P.S.: http://www.federalreserve.gov/BoardDocs/Speeches/1999/19990429.htm

Greenspan: "Guidotti suggested that countries should manage their external assets and liabilities in such a way that they are always able to live without new foreign borrowing for up to one year. That is, usable foreign exchange reserves should exceed scheduled amortizations of foreign currency debts (assuming no rollovers) during the following year...Some emerging countries may argue that they have difficulty selling long-term maturities. If that is indeed the case, their economies are being exposed to too high a risk generally....." e pensare che Greenspan parlava di emerging countries!!!

Il Folletto

“Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”

George Washington

In barba all'inflazione, Auguri per un Felice anno 2010 ! (Un po' in ritardo, causa impegni !) - (Leo)Poldo (GO)

ancora auguri! ho una domanda: come mai mercato libero londra non funziona? mi sono perso qualcosa?
grazie, Adamo

scusate ma la performance di zio bond non mi sembra esaltante: prendete un buon fondo obbligazionario, tipo schroders euro bond e vi accorgerete che in tre mesi ha fatto piu' 2,70%.....!!!!!

MA COME FATE A FAR PAGARE UN PORTAFOGLIO CON QUESTE PERFORMANCE MODESTE QUANDO QUALSIASI BUON FONDO-ETF OBBLIGAZIONARIO A TRE MESI HA FATTO IL TRE PER CENTO????????

VEDASI AD ES. SCHRODERS EURO BOND (OVVIAMENTE FINCHE' I TASSI BCE SONO FERMI...........)

GRADIREI FARLO SAPERE AI LETTORI, GRAZIE, ALTRIMENTI NON E' LIBERA INFORMAZIONE............

A quel furbo di Karlos, che non ha capito nulla anche dopo la nostra spiegazione ...

1) Non pretendiamo di essere i migliori, ma di fare un buon lavoro.

2) I fondi (come il nostro portafoglio) sono buoni o cattivi anche in base al rischio che si sono presi, quindi prima di parlare lei karlos dovrebbe informarsi in maniera intelligente

3) 1,24% è netto , mentre le performance dei fondi sono lorde

4) Il portafoglio è partito con un investimento pari al 10% dal capitale nella prima settimana. Dopo un mese e mezzo era INVESTITO solo al 55%. Quindi la performance in realtà è stata molto piu' elevata. Lo abbiamo spiegato piu' volte ma lei parla a vanvera prima di informarsi.

e infine....ma cosa ci sta qua a fare???? Lei così sapiente e così intelligente...mi aspetterei cose sublimi dalla sua intelligenza.

Come vede l'ho pubblicata....ma solo per far capire a migliaia di lettori che la stupidità e l'arroganza regna anche durante le vacanze di natale....

Non voglio prendere le difese di Paolo,perchè si sa difendere da solo molto bene,NON voglio far publicita al suo portafoglio,però voglio dire la mia esperienza.
Ottimo portafoglio,ottimo servizio ,disponibilità verso il cliente,trasparenza,sicurezza dell'investimento,non so cosa cercate voi.....ma i fondi non danno tutto questo, se a voi pare poco,dimenticavo tutte le obbligazioni sul mio portafoglio sono in guadagno se vendessi ora.
Andreaa

Per fare un buon lavoro bisogna puntare al massimo, cioè ad essere i migliori..

Puntare al massimo ?? Argentina,cirio,parmalat,Finmatica,
Giacomelli,Finmek,la Veggia,General Motor,Lehman Brothers,Alitalia,
Vedete voi.........
Andreaa

Certo che si deve tendere a essere i migliori, ma nessuno ci riesce a esserlo sempre.

....PURTROPPO...