http://www.ernharth.com/vi/2006/03/29/us-banks-backing-off-us-debt/ Don't Be a Fall Guy Wed, 19 Nov 2008 14:49:32 +0000 http://wordpress.org/?v=2.6.2 http://www.ernharth.com/vi/2006/03/29/us-banks-backing-off-us-debt/#comment-1996 Vigilant Investor | Ernharth Perspective » Blog Archive » Foreign Nations Contemplate Dollar Collapse Thu, 30 Mar 2006 16:42:33 +0000 http://www.ernharth.com/2006/03/29/us-banks-backing-off-us-debt/#comment-1996 [...]     Helping the Vigilant Identify Blindspots of Conventional Wisdom U.S. Banks Backing Off U.S. Debt [...] [...]     Helping the Vigilant Identify Blindspots of Conventional Wisdom U.S. Banks Backing Off U.S. Debt [...]

]]> http://www.ernharth.com/vi/2006/03/29/us-banks-backing-off-us-debt/#comment-1991 The Three Rivers Post & Standard » Foreign Nations Contemplate Dollar Collapse Thu, 30 Mar 2006 16:24:51 +0000 http://www.ernharth.com/2006/03/29/us-banks-backing-off-us-debt/#comment-1991 [...] We would add, there must also exist a point where those same nations decide that buying the U.S. treasuries of a country with a runaway federal deficit, an aging population, and massive unfunded entitlement liabilities (Social Security, Medicare, etc.) being hidden off the official balance sheet (estimated at $3.5 trillion vs. the official reported $350 billion), might not be the most attractive thing to do 1) with current interest rates being at 50 year lows, and 2) given the massive amount of dollar holdings they already have (see our March 29 entry and graph) when the U.S. also seems to be in a no win position for digging itself out of debt. That situation will force it to inflate the dollar at an even faster pace than is has (M3, the broadest indicator of money supply has more than doubled since 1990 from about $4 trillion to over $10 trillion today), which will only press foreigners to hasten their search for diversifying into alternatives. [...] [...] We would add, there must also exist a point where those same nations decide that buying the U.S. treasuries of a country with a runaway federal deficit, an aging population, and massive unfunded entitlement liabilities (Social Security, Medicare, etc.) being hidden off the official balance sheet (estimated at $3.5 trillion vs. the official reported $350 billion), might not be the most attractive thing to do 1) with current interest rates being at 50 year lows, and 2) given the massive amount of dollar holdings they already have (see our March 29 entry and graph) when the U.S. also seems to be in a no win position for digging itself out of debt. That situation will force it to inflate the dollar at an even faster pace than is has (M3, the broadest indicator of money supply has more than doubled since 1990 from about $4 trillion to over $10 trillion today), which will only press foreigners to hasten their search for diversifying into alternatives. [...]

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