Despite this,
usdcrisis.com
we technically do have some fiscal room before we hit
the wall, unlike UK and Japan (However, fiscal problems
elsewhere could affect us, the markets are global) The reason
is that long term liabilities don't matter until they become
a near term problem.
That said, I see a problem funding $1 Trillion plus budget
deficit
- in the absence of foreigners
- in the absence of the Fed (Starting April 2010)
Who else has a Trillion dollars?
Who funded the stimulus in 2009?
The answer is, the Fed, by printing and buying junky MBS,
which banks swapped for new AAA T-bond debt.
I am looking for a potential turn into W between now and
April, watching interest rates.
If they start RISING fast, head for the exits/short the
markets.
For the most part, I see problems arising by this
Summer, when the government mortgage support runs out in
April.
Is the stock market forward looking? Nope. The pricing mechanism
is screwed up by printing and derivative/trading
bubble. So, they might not drop at all and,
in fact, run higher, then crash when liquidity hits the wall. BWDIK? |
