So what?
I love the doomsday crowd. I particularly get all warm and fuzzy when they refer to our trade deficit as an imbalance. This is akin to saying I have an imbalance in my Chase checking whenever I use my debit card. I use my checking account when I pay my bills, buy shit off of Amazon, go on vacation, etc. The debits in my checking account are equal to the exact amount of goods and services I purchased, used, and consumed, which boils down to an accounting entry so to speak. My amount of money may have decreased, but my supply of real goods and services increased.
In order for the rest of the world to dump their dollar holdings, they MUST exchange them for real goods and services produced by Americans. This means any foreigners would have to take their US dollars and give them back over to Americans who worked to produce the goods and services they decide to purchase.
From the article:
He goes on to discuss part-time jobs, the understating of employment, the looming US recession, the US can't afford higher rates of interest, don't deserve their bond rating, and will be downgraded...
LOLZ
The FED sets the interest rate all along the term structure, but will allow for some fluctuations between the discount rate and IOR rate.
