Government's Debt Auction Disappoints

The government tried to sell bonds yesterday to raise needed capital for the season of bailouts, but there was a very lukewarm response. Some interpret this to mean that there is nervousness (verbalized last week by the Chinese Premier) that America is becoming a risk. The Treasury ended up having to pay higher rates of interest because the slim demand caused bond prices to fall. But another economist had a different take on it stating that the fact that rates are rising is very good news, not bad news. It means that banks and investors are finally moving the vast sums they are sitting on out into the economy to finance consumption and investment — exactly what we want to happen. What weighed on speculation was an equally bad bond auction in London. Click on the title above to read more about this essential tool to finance our short term plans.