29 March 2009
Don't get used to money being so cheap for much longer. The Federal Reserve has held rates artificially low for too long, and with all of the stimulus money being thrown around, it will be much more difficult to maintain those low rates. Eventually, China and other investors in US dollars will require much higher rates to compensate for the greater risk in holding US treasuries. Once some other countries get their economies in order (without running their printing presses), the dollar will no longer be the currency of choice for stability and security. Treasury prices will fall sharply and US interest rate will correspondingly skyrocket. This will be followed by high inflation and all of the problems associated with inflation.