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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (49037)1/7/2006 7:54:22 PM
From: GST  Read Replies (2) of 110194
 
There is NO scenario where we can we escape the immutable fact -- there is no way we will be able to finance our consumption (both private AND public) without foreign capital. This is not speculation. It is fact. We are and will be in deficit on BOTH private and public accounts. We can debate the ups and downs, but there is no debate on the central fact -- we are a debtor nation and that is not about to change no matter what happens to our economy in the next 5 years (or more). Our financial future is no longer in the hands of the Fed (it never was, but there was a time when the Fed had a major influence). When the economy slows the dollar drops then we will pay the price of our dependence in BOTH higher interest rates AND higher prices for goods while our assets fall in value and our purchasing power evaporates. This is called stagflation.
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