First, as the recession deepens, it will become apparent to all that the Fed has no will to fight inflation. Worse still, it will likely be seen that the U.S. Administration is diverting its vast resources away from restructuring and infrastructure spending towards the potentially inflationary, socialist-style prevention of restructuring through the subsidization of clinically dead companies, like the U.S. auto industry.


Second, the Government can be expected to issue vast amounts of additional long-term debt. Third, foreign central banks will be forced to spend internally on their own domestic stimulus packages. These major investors, especially China, will buy progressively less U.S. Treasuries and may even become major net sellers, driving prices down.


Finally, if America loses its prestigious triple-A credit rating, the prices of its Treasury bonds will plummet.


With the safe haven of U.S. Treasuries threatened, investors may increasingly turn to the refuge of the sovereign debt of hard currency nations, gold and even to the top rated companies in economies like China, where the government has massive amounts of cash to spend on competitive restructuring and infrastructure.


In short, risky U.S. debt instruments will have no fundamental drivers in 2009. U.S. government debt has a brighter short term future but in the end may be just as dangerous.


For a more in depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar denominated investments, read Peter Schiff’s new book "Crash Proof: How to Profit from the Coming Economic Collapse.
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Zelo dober članek in veliko resnice na pravem mestu. Če sem dodamo še dejstvo da se Kitajec in Rus dogovarjata da medsebojno ne bosta več poslovala v Ameriških dolarjih pač pa v obeh domačih valutah, in nasvet nekaterih Slovenskih ekonomistov gospodarstvenikom naj se obračajo na Kitajske in Ruske trge potem je članek zadetek v polno.