Friday, August 28, 2009

Early signals of financial reckoning day for USA

I saw a news item that the Swiss bank Wegelin is closing its US branches due to the US government's new requirement for the bank to turn over certain data. However, buried in the article is this:

"It added that it believes the US overestimates its attraction as a financial centre, and is advising its clients to get out of all US securities."

Take note of that. Investors in other countries are getting out of US securities. That means that the day is approaching when the Treasury holds its auction and there will be no buyers. Then, how will the government finance the crushing deficit? Taxes and printing money, which leads to inflation. It could ultimately bring down our economy. It's time to get back to fiscal responsibility before the whole house of cards collapses.

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