China is shifting policy from plowing reserves into forex to investing internally. At the same time, our government is jacking up spending by the trillions, in order to artificially prop up businesses. Quit frankly, where the fuck is the money coming from?
We are a debtor nation. Without the support of foreign government buying our notes, we will default. The reality of higher taxes will come to fruition, because of necessity, not choice.
Of course it’s easy to get all doom and gloom, as the market knifes lower. However, look at the bigger picture. World growth is slowing to a standstill. Domestic employment is through the floor boards and America, individually and as a whole, are insolvent.
Sure, we can print more notes. The expense will be great and the pain will be ridiculous.
With that in mind, long term, shorting treasuries, via [[TBT]] , is a dunk shot bet. Eventually, rates have to go up, in order to entice investment.
In the meantime, hedge up or face certain financial death.
Barrons has a good read about America’s dicey line of credit.
UPDATE: Last bull surrenders.
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