Thursday, August 13, 2009

Reaching the Zimbabwe standard

The nightmare of a default on U.S. Treasuries.
Prominent economists have starting considering a possible Treasury default, while the business-news media and investment rating agencies have begun openly discussing a potential risk premium on the interest rate that the U.S. government pays. The CBO estimates that the total U.S. national debt will approach 100 percent of GDP within ten years, and when Japan's national debt exceeded that level, the ratings of its government securities were downgraded.
Read the whole article, a brilliant analysis.

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