[giotto]

What I want to know is, WHERE is the money coming from right now? Are they simply printing it, or in the case of electronic funds, just adding zeros to the balance? Or are they borrowing it from China or Saudi Arabia or someone? I’m afraid I don’t understand the mechanics of this cash transfusion.

[Gaffer]

The government is guaranteeing untold amounts of debt on the full faith and credit of the United States. Previously, when times called for it, more and more treasury bills were sold. China has bought up a buttload of them. However, even China isn't buying them any more. Now we are left with empty promises not backed up by real value. In short, there will be money, but there is no value behind it. Here's where rampant inflation comes it ---government printing money on worthless paper. Prices go up because of too many worthless dollars chasing too few goods (that people are willing to take worthless paper for).....

In the last century before WWII Germans did this --- their citizens ended up burning the paper to keep warm......

[Thank You Rush]

“”Or are they borrowing it from China or Saudi Arabia or someone? “”

Geithner was asked the question today - “Where are you getting the money? Are you printing it or borrowing it?” I don’t remember who asked the question. He didn’t hesitate but said, “We are borrowing it.” The questioner asked, “Who is buying the paper?” Geithner said, “We will sell it to people who want to buy it” or some equally dumb reply.

[fightinbluhen51]

Article this morning the Financial Times that China basically is saying “We hate you guys, you’re insolvent, but there is nothing else we can do to invest the trade imbalance in, so we’ll continue to fund you guys.”

[red irish]

I believe it’s selling bonds to China. That is if China wants them.