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Northwest Voices

Seattle Times letters to the editor

May 28, 2009 at 4:00 PM

Treasury-bill sales

Unrestrained bill creation will kill dollar’s value

The article “Will sales of T-bills continue to flourish?” [Business, May 27] asks the question, explains that we have quadrupled our debt over the last year — necessitating the urgent need to sell newly created Treasury bills (T-bills) — and tries to assure us that “economists believe that the risk is low.”

The deep concern revealed by Associated Press writer Martin Crutsinger is whether China will continue to buy even more U.S. T-bills and bonds. Bear in mind that China, Russia and Brazil have recently expressed the desire to establish a new international currency to replace the U.S. dollar.

If the United States continues to double or quadruple its unrestrained creation of dollars, the eventual result will be to reduce the value the dollar, and therefore T-bills, to 20 to 50 percent of what it was worth in 2008.

This administration needs to learn the fundamentals before it is too late. If it is true that 47 percent of the U.S. Treasury notes and bonds are held by foreign nations, a mass exodus may trigger the same collapse of the dollar as happened to the U.S. stock market in 2008 when the foreign investors pulled out.

— Gerald N. Yorioka, Mill Creek

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