In my particular case, I chose the net return on national investments. In 1998, this flipped - the US was paying more out to foreigners who owned US assets than it gained from owning overseas assets. It had moved from a bank balance in the black to an overdraft.
I thought this would grow slowly over the next couple of decades before people would start to notice. I didn't expect the Bush administration to come along and fuck things up quite as thoroughly as it did. Hell of a job, Georgie.
And now this news:
Check out the chart showing the recent spikes in the US 10-year credit default swap. In other words, the market is now pricing-in the genuine possibility that the US will struggle to pay-back some of its long-term T-bills.
That possibility is still deemed to be quite low. But the ultimate financial question – until recently, unthinkable – is now being asked. Yes siree, the mighty US government could default. That’s how much the world has changed.
Welcome to the world run on the Euro.