[quote=stockstradr]I bet all of you that one day, in retrospect, the dollar (and of course, dollar-denominated Treasuries) will be seen as the Bigger Bubble that came after the housing bubble.
..because the dollar and dollar-denominated Treasuries ARE already in a bubble now.[/quote]
stockstradr. I agree. With all of the money being printed now, http://en.wikipedia.org/wiki/Money_supply inflation is coming. We have to get beyond the current stagnation but when people start to buy again, inflation is here. The book aftershock makes the point that 2 more bubbles are going to pop. first the dollar bubble, built up since 1971 when we went off the gold standard and there was no limit to how much money the fed could print. Once world investors loose faith in the dollar as an investment, which they are going towards now, prices of dollar denominated assets will fall, the fed will print more money to cover the losses, inflation will get worse and we will not be able to pay the interest on the national debt, which will be over 100% of the GDB by that point. Maybe much over. A default on the national debt is then possible or a conversion to another currency, debasing the dollar debt as described in roubini’s new book. When will all of this happen? aftershock estimates that the dollar bubble in roughly 2014, the national debt bubble sometime after that. People don’t want to face the possibility of the US defaulting on the national debt but at some point, the bedt becomes too high to pay off and no-one will buy more of them. Any thoughts anyone else?
