When someone buys a toyota for example ,how does that place us in a position to have debt to japan.Is it because of countries who lent the US money by buying regime bonds?Please clarify.
I know it is when we buy more imports than exports in value. But that is still unclear.Specifically,why does it matter if we buy much more than we sell? I realize the national debt has to do with trade but it also relates to how much this country borrows money to finance our own budget.
US mortgages are usually fixed rate, and can be prepaid early without cost, contrary to other countries. If rates go down, a lot of home owners will refinance at a lower rate. This means that the Agencies lose assets. By issuing a large number of callable bonds, they have a natural hedge, as they can then call their own issues and refinance at a lower rate. The price behaviour of a callable bond is the oppsite of that of puttable bond. Since call option and place option are not mutually …