It's kind when disaster hits an area or town. You want to be where the pain will be felt less, the richer area. Thus, long the dollar is the correct posture.
See people used to have a class in school called civics. It is no longer taught. American history in the twentieth century has recorded the amazing achievements of the Federal Reserve bankers. First, the outbreak of World War I, which was made possible by the funds available from the new central bank of the United States. Second, the Agricultural Depression of 1920. Third, the Black Friday Crash on Wall Street of October, 1929 and the ensuing Great Depression. Fourth, World War II. Fifth, the conversion of the assets of the United States and its citizens from real property to paper assets from 1945 to the present, transforming a victorious America and foremost world power in 1945 to the worldâs largest debtor nation in 1990. Today, this nation lies in economic ruins, devastated and destitute, in much the same dire straits in which Germany and Japan found themselves in 1945. Will Americans act to rebuild our nation, as Germany and Japan have done when they faced the identical conditions which we now face--or will we continue to be enslaved by the Babylonian debt money system which was set up by the Federal Reserve Act in 1913 to complete our total destruction? This is the only question which we have to answer, and we do not have much time left to answer it. Just learn to read people. http://www.apfn.org/apfn/reserve.htm Theres even a movie for the total illiterate.
http://www.apfn.org/apfn/reserve.htm Please take the time to learn where it all started and then you can understand where its going. Its not a good ending story, people.
i'd like to know the answer to how i could hedge myself against this as best i can when the situation begins as well if anyone knows.
i haven't read all the posts but i want to say something about the article by the op. those countries will not stop lending to the u.s. those countries aren't buying u.s. treasuries because they believe in the economy. they are buying u.s. treasuries because deals have been made in international politics. you do for me and i do for you. that's why you have the world's central banks cooperating right now because 1 u.s. firm (lehman) blew up. also, as long as the u.s. has the most powerful military in the world, none of those countries will do anything drastic. they may send a "message" from time to time, but they won't dare to really mess with the u.s., otherwise that country will suddenly find themselves to be harboring terrorists and is a threat to national security. get it?
This is silly. Where do you think the government finds the money to finance the US military? What if lenders start asking for much higher yields on that borrowing?
CHICKEN LITTLE, THE SKY IS NOT FALLING!!! Everyone always looks at how much in debt the US is because its in debt "trillions" of dollars. Well we also have the largest economy. You put those numbers in a % of the GDP and you see something much different. The US debt is only 60% of the GDP...by comparison canadas debt is 68% of their GDP. Italy is 104% of their GDP. And before South America jumps in, your country in brazil is not exactly debt free with 45% debt as of 2007. In fact if you look at the countries that are not doing so great you notice they have very little debt.
Irrelevent this stupid debt/GDP ratio... What is our debt? It USED to be majority owned by Americans in the form of 30 year bonds.. NOW it's owned majority by foreigners in the form of 2 year T-bills.. Can't you see the writing on the wall?
Two big differences. First, Canada's budget has been running a surplus for a long time, and that allows for a hell of a lot more flexibility in handling the legacy debt. The US is increasing its debt load, which comes with a loss of flexibility and control. Second, the Canadian budget does not have the kinds of off-the-books liabilities that are (for now) excluded from the US calculation you present above. One of these liabilities is coming home to roost as we speak - namely the implied guarantee of the GSEs. So the US number is highly skewed to the downside - by how much is not clear - estimates on the "real" debt range anywhere from 100% more than the current number to 1000% more than the current number. Using the lowest of the estimates puts debt-to-GPD at 120%. That...is not low. And not at all clear how this can be funded with the 0% interest rates hit today on 3-month T-bills - unless the debt markets are telling us we've just tumbled over the deflation cliff.