Attachment
Analysts at “Sun Worldwide” are apparently labeling the approval of a $155bn jobs bill in the US House of Representatives a 2nd stimulus package by stealth.
Should the bill be approved by the Senate early next year, it will fly in the face of vehement denials by US Treasury Secretary, Timothy Geithner of the need for a 2nd stimulus package to help blunt the impact of the most debilitating recession since the 1930s.
“Sun Worldwide” sources suggest that their understanding of the structure of the package indicates that some $75bn of the total cost will be met from the government’s bank bailout fund whilst the remainder would come from additional government borrowing.
The aim of the bill would be to pump additional funds into infrastructure projects including highways and mass transit systems as well as pay teacher salaries and repair school buildings.
Although “Sun Worldwide” believe the aims of the bill are laudable, their analysts suggest that the seemingly endless list of government initiatives to spur the economy are seriously affecting the way the US is perceived by its creditors because of the massive amount of debt that has to be issued to fund them.
This, they believe, may culminate in investors demanding higher yields on bonds to compensate for what they believe is the additional risk of holding US government debt.
“Sun Worldwide” reiterated its advice to clients to avoid investing in US treasury bonds.
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