Millibuster,
"The Americans do not have to print as they had sufficient international buyers who did the printing for them, thus allowing the US government to conduct deficit spending."
I have never seen so much confusion like in your case. The difference between the Federal Reserve System and the Eusosystem is marginal and only technical. In both cases by statute they print money in order to buy what is considered eligible assets the problem being that due to German imposition in the case of the Eusosystem until recently government bonds were not consider as eligible assets. Now that they are thanks to QE, both systems are printing money in order to buy government bonds with the sole exclusion of Greek bonds. This is done in order to fload the markets with money.
If in the case of the USA bond market there is more foreign interest and participation than in Germany (Germany bonds are the benchmark for the Eusozone) then that fact is only expected to appear reflected in the
INTEREST RATE DIFFERENTIAL between US and German bonds.
You can see this in action by looking at the the bond spreads between each Eurozone member country. With everything else being the same, where there is more demand lower must be the interest.
http://www.mtsmarkets.com/Products/FTSE-MTS/European-Bond-Spreads
http://www.fxstreet.com/news/forex-news/article.aspx?storyid=706be7fb-8be1-401e-a92a-11be5c629a4b
Foreigners do buy bonds in America with US dollars
THAT HAVE BEEN PRINTED, that is,
WITH DOLLARS THAT ARE IN THE AMERICAN BANKING SYSTEM and which through exports or capital transactions channeled through the forex markets they became owners. The only system that can print (issue) dollars is the American banking system.
FOREIGNERS CANNOT PRINT US DOLLARS.
You are getting your lessons from the wrong people, including from the egnoramus populating this thread.
"someone would have suggested, as recently as six months ago, that
China would sell over $150 billion of
US Treasurys in a handful of months, analysts would have warned of an impending disaster in the U.S. bond markets.
Forecasters would have said that the dollar would crash, rates would skyrocket and stocks would plunge as America's reliance on the kindness of strangers to finance its budget deficits had finally exhausted their generosity.
Well, guess what? China did just that and other global central banks have slashed their holdings of U.S. Treasurys with barely a ripple in the multi-trillion dollar bond market.
Once again, the prophets of doom were wrong. And again, wrong for all the wrong reasons."
