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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bond_bubble who wrote (50938)	1/23/2006 1:16:58 PM
From: GST	Read Replies (1) \| Respond to of 110194

The Fed does not control US interest rates. Do you understand the US current account deficit? Those who finance the deficit set interest rates. They will charge a higher risk premium as the dollar falls. If the dollar falls gradually but significantly in coming years, expect long US interest rates to come to reflect dollar currency risk. Our economy can stall, money supply can shrink and the cost of borrowing can go up while prices escalate -- it is the price we pay for using foreign debt to finance imports while maintaining a low savings rate. In sum, we are going to look and act like we are broke. And nobody is going to be offering us any charity or discounts -- on the contrary, we will be treated as the poor credit risk that we have become.