How Long Can the US-Dollar Defy the Law of Gravity?
Gary Dorsch Editor Global Money Trends magazine Jul 10, 2009 In the midst of the longest and deepest, post World-War II recession, America’s financial position with the rest of the world has deteriorated sharply. Three decades of massive trade deficits have turned the United States from the world’s top lender to the world’s largest debtor, – and dependent upon the whims of the so-called emerging nations, laden with huge foreign currency reserves, to finance the bailout of Wall Street Oligarchs, and President Barack Obama’s social programs. Foreigners own roughly half of the US-government’s publicly traded debt, or $3.47-trillion, representing nearly 25% of the size of the US-economy, the highest level in history. If foreign lenders were to significantly reduce their purchases of US-Treasury notes, without even dumping their current holdings, US long-term interest rates could zoom higher, and the US-dollar could crumble. That would deal a double whammy to the US-economy. Higher yields o
