When it comes to money, America makes it rain: Varney
FBN's Stuart Varney on the expanding U.S. economy and foreign money pouring into America.
Can we be clear on this?
When it comes to money, America is the only game in town. The money is pouring in from all over the world.
Think about this: Every day, trillions of dollars slosh around the world. It’s looking for a good yield, interest. And it’s looking for safety -- you get both in America. That’s why money from overseas is flooding in here.
Our economy is expanding. Our currency is king of the hill, and yes, when you lend money to us we actually pay interest. And nobody doubts we'll pay up. Safety and interest! What a concept!
It’s different in that democratic socialist paradise, otherwise known as Europe. Over there, you pay the government to lend them money. Isn't that crazy? But that’s the way it is. There's no interest. There's no rate of return. No yield. You lend and they don't give it all back.
Suppose you're a big financial institution in Germany. Put $1 billion into a government bond, and after a year, you don't get it all back. They keep $3 million. You're the lender, but you're paying the borrower. It’s the world turned upside down!
If you put that same billion into an American government bond, America will pay you $20 million interest. No wonder the money comes here!
And don't think this is all hifalutin finance out of your pay grade -- oh no! This makes a big difference to you. Mortgage rates are being pushed down. Inflation is being pushed down. The economy gets another shot in the arm. Being king of the hill is cool!
Now let’s deal with safety. After all, you don't want to take too much risk. Again, let’s be clear: America is the safest place around!
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Suppose you're managing money in Hong Kong -- that’s Asia’s financial center. Have you seen what's happening? You think your money is safe there? You can still smell the tear gas!
Or running money in London, Europe’s financial center. You've heard about Brexit?
When it comes to safety, America’s got 'em all beat.
This is not mindless nationalism. It's economic reality. America's the only game in town.