From: "Phil Payne" 

> > That has got to hurt.
>
> It would if true, I haven't seen that kind of data anywhere else yet.
(I've
> been predicting such a thing for some time, but not because of the bond
> prices)

The issue is that the room for maneouvre has been consumed on every axis -
there's now nowhere to go.

You can't place more debt, no one wants the equities, interest rates can
hardly go much higher and the deficit cannot be cut drastically without a
domestic disaster.  And where's the oil price going?



http://www.telegraph.co.uk/money/main.jhtml;jsessionid=3035JFT53DLYXQFIQMFCFGGA
VCBQYIV0?xml=/money/2006/05/16/cnus16.xml

"Mr Bloom said fears of a dollar collapse had been the chief source of
contagion spreading worldwide, compounded by an inflation scare hitting
bonds. After rallying 1.03pc against the euro to $1.2807, the slide is
likely to resume soon.

"I expect the dollar to fall fast and furious against everything
because the point of inflexion has been reached in US interest rates,"
he said. "If the Fed is not going to keep rewarding me with higher
rates for the risk of holding dollar assets, why should I hold them?

"The US is importing $750bn more than it is exporting every year and now has
$2,500bn in external liabilities. This is a big call on world savings and it
can't go on forever," he added. HSBC is advising buying Swiss francs,
yen, and Scandinavian currencies until the storm has passed."



Have you tried dividing the number of US taxpayers into that $2.500
billion? That's how much you've paid yourselves but haven't earned.  In
short, how much each taxpayer owes the rest of the world.

The real problem is not a deficit of 7% of GDP - it's an administration
that doesn't think it's a problem.  Or doesn't care, just as it doesn't
care about anything else not on a right-wing "Christian"
manifesto.

You'd better hope that God mentions the economy the next time he calls
Shrub for advice.

--- BBBS/NT v4.01 Flag-5