THERE WAS A MAJOR ANNOUNCEMENT WEDNESDAY BY THE TREASURY DEPARTMENT WHICH SHALL IMPACT THE MARKETS CONSIDERABLY TO THE UPSIDE AS INTEREST RATES FALL. THE FALL WILL MAKE
BORROWING CHEAPER FOR COMPANIES LIKE KO AND THUS PROFITS GREATER. THE STOCK MARKET STILL HASN'T REALIZED IT YET, BUT WHEN IT DOES WE WILL GO HIGHER. HERE ARE SOME EXCERPTS FROM TODAYS WALL STREET JOURNAL ARTICLE:
The Treasury Department announced a major restructuring of its plans to sell short-term government securities, the latest sign that the era of budget
surpluses is reshaping debt markets and the economy.
After this month, the Treasury will stop issuing three-year notes, sold since 1976. And after next month, it will cancel the monthly auctions held since
1991 for five-year notes and sell them quarterly instead. The changes allow the Treasury to boost the size of other auctions while still reducing the total amount of money it borrows. Prospects for a budget surplus for the fiscal year ending Sept. 30 -- the first since 1969 -- and rising expectations of government black ink into the foreseeable future present a new backdrop for the Treasury. Wednesday, the Congressional Budget Office projected that the surplus will be between $43 billion and $63 billion, much higher than the $18 billion the agency had recently predicted. Unless the economy sours, next year's surplus will be between $29 billion and $39 billion, the CBO said. In the 12-month period ended March 31, the government ran a surplus of $19.3 billion.
Over the past six years, the government's share of total borrowing in U.S. credit markets has fallen to 6% from nearly 60%. That has played a major role in keeping down interest rates; the Treasury now competes less with private borrowers for funds.
Wednesday's announcement means "there will be continued downward
pressure" on rates, said M. Cary Leahey, an economist with High Frequency Economics Ltd. in Valhalla, N.Y. "People can talk about [Fed Chairman Alan] Greenspan maybe raising rates, and the lack of demand from Asian investors," he added. "But with supply drying up, that will still help lower rates."
The fact that the government is running a surplus is a major factor in the in interest rates . the biggest hog of all time is on a diet maybe fasting . the capital surplus that has been feeding the hog will overflow the hoppers, thus the equities will look better to everyone with cash . The future of the blue chip companies' price will be enormous .If you are a gambler there are thousands of stocks to gamble on if you are not then you have government bonds and KO . The ko tract record far exceeds the government . for safe havens and a hundred years of practice in managing money. vs a hundred years of mismanaging money. Who do you trust? The money poured into 100 dollar hammers 500 dollar toilet seats , Jobs for friends of Bill. That is so upseting I think I'll go get me a Coke. notbuffett