shut up mainstream, sensationalist media! people are freaking out about the trade deficit and are fearful that other nations are going to quit buying our treasuries, thereby sending our economy to the crapper.
check out the current 10-yr bond yields:
Japan: 1.54%
UK: 4.45% (inverted yield curve, you get more juice on the short end)
Germany: 3.5%
United States: 4.56%
basically, other nations like our treasuries because they can't get this kind of yield at such a low risk ANYWHERE ELSE IN THE WORLD (i.e., whose government-backed debt would you trust more if you were japan? brazil? or the united states? i thought so). as long as the fed lays off on raising interest rates, we should be in good shape for some time; it would also help the trade deficit if dubya would stop spending like a democrat but that's another post.
other nations are going to keep buying our debt because they're getting more bang for their buck. in fact, greenspan's successor could achieve celebrity status if he loosens the policy before we see a situation like the inverted yield curve in the UK. our economy will be in good shape as long as consumer spending remains steady, inflation is under control, and energy stays relatively tame.
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