Friday, September 26, 2008

One more point on US government debt

Okay, so US govt debt rates are really low, which would seem to imply low risk, but is that really the long run reality? However, yes, I'm aware that rates are amazingly low, making USG debt cheap cheap cheap. I just don't think those rates are sustainable for the long run, although it is clear right now that the Fed will pump as much money into the markets as they need to stay liquid in the short run. At some point, though, the holders of our debt, especially in light of a depreciating currency, are going to ask for a return, don't you think? Or is my brain so warped by looking at what has happened over and over again in Latin America. Next on to more on India.

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