When will which come to an finish in your opinion?
Once it occurs, from what I can tell, the US can contend great bye to any sort of wealth generally once the large cost increases caused by inflating the banking crop up as good as have been manifest in bland life.
Once it does, from what I understand, all the US will have left is the copy press due to the actuality which the production bottom is probably utterly gone. We will not be means to traffic with countries in any normal approach unless they, for a little reason, go upon to accept the horribly devalued as good as arrogant dollar currency. And, upon tip of that, you will still have to compensate off the trillions of dollars in Treasury Bonds which were already paid for by unfamiliar countries.
Another Scenario:
What happens if, unfamiliar countries ask for seductiveness upon the Treasury Bonds they buy to be aloft so the Federal Reserve sets the seductiveness rate up but, which triggers the Option Arm as good as Alt-A housing collapses (parts 2 as good as 3 of the housing collapse) as good as creation it most harder for businesses as good as people to get loans?
Question created upon Feb 15, 2009
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The printing presses are already running. The money supply has already been inflated — about 200% so far. Foreign investors are already cutting back on purchases of US treasuries, especially longer terms. This is a debt-collapse Depression (aka “balance sheet depression”). And so far Congress and the Federal Reserve & Treasury are doing exactly what will make things “worser longer.”
Bottom line? Get all your debt in fixed rate form while you can, because we are going to see some serious inflation. Your premise is correct — increasing our money supply without increasing the velocity of transfer is going to make our govt. bonds less attractive.
As soveriegn funds pull money out of US govt. debt, the question is where they will move it. There aren’t a lot of attractive options.