Foreign countries unloading US debt

For the 3rd straight month China has reduced their holdings in US Treasury bonds. (story here from BusinessWeek) Japan and Russia also sold off US Treasuries. While some may see this as a positive, it has more negative connotations as it forces the Treasury to scramble for other buyers and may weaken the perception of security in the market for US bonds. Eventually the Treasury may have to increase the interest rate to attract more investment. This increases our long term debt load.

While US officials are not terribly concerned, it doesn’t bode well when you look at the spectacular amount of debt we are facing. Should our dear comrade leader’s plans for obamacare, Cap & Tax, other budget busters pass, this could have serious implications. The government will be even more inclined to search for additional revenue sources – like a VAT and confiscating your retirement money.

Stay tuned…

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