brianoh

U.S. Dollar: The Next Bubble to Pop

Your article says : "3-month Treasury yields have plummeted from 5% in July 2007 to (gasp!) 0.02% right now! The 1-month yield is 0.01% and 1-year 0.61%. This is fairly ridiculous. I fail to understand why any investor worth their salt would not just get cash (the physical paper bills, not the electronic kind) and either hold it or buy assets. "

I am surprised that you don't see why investors don't buy assets. Obviously they don't trust the value of those assets. What assets would you suggest they buy?

The US strategy for the past decade has been to inflate asset prices to absorb foreign investment and fund the US economy. The bursting of the housing bubble saw the end of that upward spiral. The policy is obviously highly flawed, because: a) it cannot continue forever, and b) it economically disenfranchises future generations.

Nevertheless, I am inclined to think in the short term that "you can't fight the Fed". Or, in other words, the Fed will destroy the US economy for short-term gain.