#1 The US' foreign debt and reliance on oil are our two biggest vulnerabilities and they are sizable risks.
China (the largest holder of US debt) hinted last week it may hold fewer dollars. Iran and Venezuela may be mixing politics with economics, but OPEC would be stupid not to tie the price of oil to a currency basket rather than to the dollar. A falling dollar makes it hard to finance a war (and all the other shit we're financing). Currency pressures such as these will *force* the Fed to raise interest rates to support the dollar at some point. Oh yea - they can't do that without pushing the economy into recession because of the credit mess. Oops.
Stating that we need to stop smoking from the oil crack pipe speaks for itself. Ever see that TV show 'Intervention'? I guess Uncle Sam's what you'd call a 'functional addict' - still holding down a job, but losing teeth and blaming it on everybody else. |