Li Daokui, an academic member of the central bank’s monetary policy committee, said that U.S. bond prices and the dollar would fall when the European economic situation stabilized.
“For now, market attention is still on Europe and for the coming 6-12 months, it will not shift to the United States,” Li said, when asked about U.S. President Barack Obama’s plan to extend tax cuts for all Americans.
“But we should be clear in our minds that the fiscal situation in the United States is much worse than in Europe. In one or two years, when the European debt situation stabilizes, attention of financial markets will definitely shift to the United States. At that time, U.S. Treasury bonds and the dollar will experience considerable declines.”
Of course, economic historian Niall Ferguson has been warning of U.S. debt for years.
Not to be outdone, Jim rogers said:
Greece is insolvent, Portugal has a liquidity problem, Spain has a liquidity problem, Belgium has been cooking the books for a long time, Italy has been cooking the books for a long time and the UK is totally insolvent.