BGR:
Your comments suggest assumptions that don't make much sense to me.
The U.S. twin deficits continue to accelerate which means that yes indeed, through one means or another, foreigners must be willing, able or amenable to provide the excess dough. Note that with every passing minute, the amount required increases, and it is THEIR CHOICE whether this is done or not. The incoming data, suggests that fewer and fewer offshore jurisdictions are ABLE to continue to bank U.S. profligacy (especially Japan) and fewer still are WILLING to, especially when they get hit twice as U.S. treasuries get smacked.
Some folks may choose to ignore the obvious message that ought to be taken from the reversal of trend in the international U.S. treasury situation, but that doesn't seem smart. This stuff has to stay offshore,... period. Only interest rate increases are going to accomplish this, and rising interest rates have obvious nasty implications for the current mania.
Throughout history, external deficits have been re-balanced through currency shifts. The buck will not be left out, in fact to me, it looks like this activity is just getting underway.
Best, Earlie |
