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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (4877)	3/11/2008 2:39:14 PM
From: stan_hughes	Read Replies (2) \| Respond to of 71454

A recession is a lock. A bad recession is a high probability. And the chances of seeing something worse than a bad recession (I won't use the word) largely depends on whether Uncle Sam can keep borrowing at a decent interest rate while at the same time he keeps loading up on his naughty banking children's bad paper. But there is a limit to how much bad paper the Fed can ingest here on behalf of its banking members and still remain an effective force, and there is a limit to the willingness of foreign lenders to fund the shortfall portion of the whole charade -- I find it quite scary to contemplate how high interest rates would be if Uncle Sam had to raise and roll over the perpetually towering mountain of debt without the assistance of the Asian CBs. Now that's vulnerability. IMO the US simply wouldn't be able to it -- they'd have to repudiate the federal debt and start over with a new currency. That's the biggest risk the investor class faces now, i.e. being stuck holding the bag in the form of paper and electronic claims on assets that are denominated in the equivalent of Confederate money. Nevertheless, not many people see it coming yet, or believe that it could really happen -- if they did, gold would already be $5,000 and climbing