W Joseph Stroupe, "Awakening ahead on bond delusion," Asia Times, June 16, 2009.

Washington and London are engaged in the most shortsighted and destructive friendly fire assault on the future of their own government bonds and currencies in recorded history. It is all being done in a vain and hazardous bid to revive their faulted bubble-based economic models that crashed last autumn.

As in any friendly fire incident, they aren't aiming to attack and destroy their own bonds and currencies, but rather they believe they are attacking what they see as the real the enemy, collapsed international confidence, with what they see as their most advanced weapon - colossal spending. But their weapon's guidance system has gone haywire and it now has their own bonds and currencies in the crosshairs.

All this government spending and the costs of servicing that debt will have to be subtracted from future growth prospects as the bill for all of it inevitably comes due in the form of higher taxes, higher interest rates, higher inflation and a much weaker dollar.

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W Joseph Stroupe is the editor of Global Events Magazine.Recommend this Post

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