5.12.03

My Way Finance - News speaks of how the US economy is actually looking bearish. I read on interesting (offline) article in The Economist that argued, under the initially rosy outlook of quarter growth, all signs are pointing towards a massive bubble. The economy is being pumped up by low interest rates, but the debt level of households is larger than it has been in quite a long time, larger than during the boom years (when debt is often a little higher, due to optimism) and that, once the interest rates ratcheted up (as they must, being about as low as they can get and to prevent problems with the dollar) then the debt burden is going to be pretty unbearable. And, of course, unemployment remains high (for the US that is, about 6%)... this is something to watch.

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