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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: pogohere who wrote (50139)1/18/2006 3:05:57 PM
From: GST  Read Replies (2) of 110194
 
<I keep wondering where US consumers will get the money/credit to make the purchases they need to make to maintain their standard of living.>

This one is easy to answer -- living standards will go down.

The US economy will go down. The US consumer will go down. The dollar will go down.

US interest rates will go up. Import prices will go up. Why? Because the dollar will go down. And why will the dollar go down even as our interest rates go up? Because we are an increasingly bad credit risk and the risk must be priced into the rate of interest foreigners charge us -- the odds of our defaulting on our debts by printing money and/or being unable to pay them rise every day and will keep in rising with every day that passes.
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