Posted on 09/24/2009 11:28:27 AM PDT by kellynla
The US is too dependent on foreigners buying up the country's debt and could face severe economic problems is that stops, Tiger Management founder and chairman Julian Robertson told CNBC.
"It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."
Robertson said inflation is a big risk if foreign countries were to stop buying bonds.
“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.”
Robertson said while he doesn’t think the Chinese will stop buying US bonds, the Japanese may eventually be forced to sell some of their long-term bonds.
“That's much worse than not buying,” he said. “The other thing is, they're buying almost exclusively short-term debt. And that's what we are offering, because we can't sell the long-term debt. And you know, the history has been that people who borrow short term really get burned.”
The only way to avoid the problem, he said, is to "grow and save our way out of it."
"The U.S. has to quit spending, cut back, start saving, and scale backward," Robertson said. "Until that happens, I don't think we're anywhere near out of the woods.”
Robertson is not very optimistic about the short-term.
(Excerpt) Read more at cnbc.com ...
ping
Okay, so our debt is out of control. Let’s downsize government, hence acquire less debt and let’s forego all foolish talk of health care reform.
headline of the future: global currency crises results in a global currency and massive shift of geopolitical power.
Obama/Frank/Pelosi and rest of their evil party are creating the Second Great Depression.
ON PURPOSE!
CNBC/NBC is hilarious.
They spent serious media time portraying Barry as the next JFK, Roosevelt, and Messiah and yet, with the moronic idiot as POTUS now, they are concerned about the US facing “Armageddon” due to his rampant and purposeful spending? Lulz. =.=
NO! If the chinese or japanese stop buying our debt we will either default, raise interest on T-Bills until they do start buying or cut spending to what levels taxes will cover spending...
Bush’s fault!!!
[Okay, that’ll be a hard sell. The liberal media will have to come up with something creative to protect the socialist in our White House from the blame he richly deserves. Still, I have faith; they’ll give it their best effort.]
I don’t recall any discussion of a different world currency even in Carter’s worst days. I could be wrong because I didn’t pay much attention to that sort of thing back in the day but I believe we’re in even worse shape now than we were then and we’re (Obama) making all the wrong moves.
“Obama will be just another Jimmy Carter...”one & done!” “
And our young people will be paying the price for years to come....
Uplift ping.
Investment tip of the day: Stock up on toilet paper.
The article is correct. Next year’s Obama budget will require about 50% of borrowing (tax receipts will cover only half of the spending). China is a major purchaser of US treasuries. If they stop buying, rates will have to rise to attract other investors.
This is a primary reason that Obama’s bow to the Steelworkers Union (the tire tariffs) was incredibly stupid and short sighted. Its why they announced the import duties at 9 pm on a Friday night, and why Obama won’t talk about it much.
I was thinking the same thing. Bringing more businesses to America would also help immensely.
CNBC has not championed Obama. In fact, some of their commentators have criticized his policies viciously, especially the cash for clunkers nonsense and the $787 billion “stimulus”.
I find it odd that oil is under $70 and gold under $1000.
Just elect Republicans. They’ll shrink the government.
Forgot the /s tag :-)
China has a lot of reserves in dollars. They might be interested in seeing those assets not depreciate.
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