My prediction: after the election, regardless who wins, a very sharp recession, followed by stagflation thru the end of the decade.
these rates aren't going up because greenspan is worried about inflation, or because he gives a crapola about deficits or americans holding cash...they're going up because the foreign nationals who buy our national debt are signalling "enough already".
It works like this: they buy our increasingly worthless paper to keep their own currencies weak, so they can keep exporting to the US. But even the Japanese and the Chinese have their limits. I suspect it's been reached.
I'm much more hopeful. I think the economy will do well during Bush's second period.
A Kerry presidency on the other hand...that would in large part depend on who controls the Congress.
On the question of foreign investment in the USA: Tell me where an investor should place his money. In the Eurozone? In Japan? In Russia??
The problem (or the boon for the US) is that there are no other geographical areas where you have both a good economic prospect and pollitcal stability. The European and Japanese economies are stil all over the place, and barring any major political earthquakes, their economic policies will guarantee that the US economy will be the best bet for a long term to come.
Of course if you are ready to gamble you can invest in Eastern Europe, Russia, India, China but the political risks are probably even greater than the economic risks in those areas...
Been hearing that same tune for years. Not gonna happen. Not having any problem selling treasuries, either.