Tuesday, January 08, 2008

Dollars and Debt

Because of the nature of today's banking system, a dollar can not be created without a dollar's worth of debt being created, and vise versa.

The U.S. Federal debt:

December 28 - $9,120,549,682,475.62
December 31 - $9,229,172,659,218.31

That is a one day gain of $108,622,976,742.69.

Over 100 freaking billion dollars in a day.

Canada’s 2007-08 Federal budget - $233.4 billion
Mexico’s probable 2007 Federal budget should be about $200 billion.

That is borrowing in a day about what these governments spend in a half a year!

The supply of US dollars out there is getting to be about the size of the supply of dirt out there. Or, the US dollar is getting to be "dirt cheap".

Will 2008 be a year for bank runs?

In the US, what is the market saying?

Florida halts run on investment pool
Local governments shaken over mortgage-related securities are suspended
from making withdrawals.

November 30 2007: 6:22 AM EST

TALLAHASSEE, Fla. (AP) -- Florida officials suspended withdrawals from a
state-operated investment pool Thursday, abruptly halting a run by local
governments spooked over the downgrade of its mortgage-related holdings.

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