Be careful what you wish forSubmitted by Bonhomme Richard on Fri, 08/21/2009 - 09:16
... all fixed income investors would like nothing better than high yielding U.S. Treasury's with the full faith and credit of the United States Government behind their investment.
Well, the wish has come true, we are going to see high yielding Treasury Bills, Notes and Bonds (again), but the only problem this time is the part about the full faith and credit of the United States Government.
U.S. Bonds, now junk bonds (high risk) ? Scary !
"In the case of the U.S. government, our ever-increasing debt load means one of two things is going to have to happen. Either ...
1. Economic growth is going to surge, sending tax revenue through the roof and allowing us to pay off all these bills, notes, and bonds.
2. Taxes are going to have to rise sharply to make good on our debts."
Even Warren Buffett Is Now Saying Bonds Could Crack! (higer interest payments (lower price for investors to buy)).