Lockstep Investing

Don't Short the Fed Yet

Many of the comments to the article restate that our debt numbers are recordbreaking and that money will flee for one thing or another.

What I am talking about is reiterated by mkreisel, this is about relative strength of the US economy. When Japan is declining at a 13% annualized rate, there is no need to worry about global inflation. Look at the Moody's report today discussing how the Eastern Europe foreign denominated debt will bring about major defaults for Eastern European countries and major Western European banks. China does not have reliable statistics to report the forward situation, but I am sure we will see symptoms of the problems festering there soon. But they still need to invest their account surplus. Seeing this, is the US really so bad off? No. Many nations need to invest their account surplus and there has been marked decrease in the securities marked "AAA" in the world. (Is that the understatement of the year right there?). That is why a 100% increase in US debt issued per year is not a crisis inducing phenomenon in the short term.

I appreciate all the comments and feedback.

Defensive Positioning in the Bailout's Absence

Good article.