January 4, 2009
-- by Dave Johnson
The next bomb to go off might be US Government debt -- timed perfectly to ruin Obama's entrance. The government has been able to finance Bush's massive bailouts-of-the-rich because people everywhere are scared enough to put their money in what is perceived to be the safest place. In fact the return on short-term US T-bills is actually negative right now. People are paying the US government to hold their money! And the government has been obliging them.
But all of this short-term debt is due very soon and the government will need to find new people to lend to it. And other debt is also coming due, compounding the problem. And on top of that the Obama stimulus plan will require borrowing another $700 billion or more.
I am not predicting this will happen. I'm saying this is another bubble and at some point it has to pop.
Posted by Dave Johnson at January 4, 2009 9:01 AM
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