Sleeping With The Enemy

It is becoming increasingly clear that that all the tax cuts will be passed and extended unemployment benefits will continue. President Obama wants a strong economy for his re-election so he is willing to sleep with the enemy in order to ensure it. The deficit will remain close to 10% of GDP and that is before an onslaught of baby boomers retire and start collecting Social Security and Medicare.

While the problems in Europe might seem foreign, it is only a matter of time before the bond vigilantes come for us. Politicians will not make hard choices unless they are forced to. I am not certain the bond vigilantes will give Obama until his re-election. At that point the adjustments that we have fought tooth and nail for the past two decades will finally happen.


Anonymous said...

Short GMAN @ 15.87


IC said...

I don't think it will even take that long. All the free money is chasing commodities, as they go up in price the cost of essential goods is increasing. We have 48 million people on welfare, no one is increasing those benefits since according to the .gov there is no inflation. As the cost of essential goods increases they will begin to starve. That will be the beginning of the end.

Chaos! said...

CBOE Equity Put/Call is .51.
That shows way too muck bullishness in a sell off. I'm long but that number's troubling for longs.