Counting public and private debt, the US is carrying $60 Trillion. For sake of argument, if interest rates were to be raised to one percent, that would add a burden of $600 billion to the US $12 Trillion economy. Point being, the Federal Reserve cannot allow interest rates to rise. They are so desperate to keep interest rates low that the Fed is monetizing almost half of Treasury bonds because foreign creditors are buying fewer and shorter term bonds. It should be obvious to anyone who will see that Washington has lost control of its spending. Foreigners see it. Most Americans don't.

This is why the carry trade is confident that they can borrow dollars for almost nothing and buy bonds in other countries at higher interest rates. The net effect is to drive the dollar down. A lower dollar would boost exports, but at the cost of higher imports, meaning higher prices here at home.

The bankruptcy of the US government and the end of dollar hegemony was never more certain. What is uncertain is how and when we get there.

Does that mean Ray is about to lose everything? Hehehehehehehehe
#2 | Posted by jackass

No. It means Jackass will lose everything.