Wednesday, April 2, 2014

Debt will undo us Americans

Janet Yellen may talk about tightening someday, but she will continue to move the goalposts to avoid actually having to do so. As global investors finally realize that the Fed has no credible exit strategy from its zero interest policy, they will fashion their own exit strategy from U.S. obligations. Should this happen, interest rates will spike, the dollar will plunge, and inflation’s impact on consumer prices will be far more pronounced than it is today. This is when the inflation tax will take a much larger bite out of our savings and paychecks. 

The debt that sustains us now will one day be our undoing.

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