The threat of inflation
By John Schroy, on March 31st, 2009 |

The supremacy of the US dollar is not yet dead, but portents of a fatal cancer — inflation — are there for all to see.
The extreme, profligate spending of the Obama administration, combined with populist, irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy.
Furthermore, a large part of the American electorate doesn’t understand or is unaware of what lies ahead.
Auction Market Preferred Shares
By John Schroy, on March 30th, 2009 |

Failures of commercial rating services to do an adequate job have been widely recognized, in the wake of the Crash of 2008. Much of the criticism, however, has been directed to the conflicts of interests that are a characteristic of these services.
This article discusses other weaknesses of commercial publishers of investment information, such as the industrial nature of their operations and their marketing focus on traders rather than long-term investors. The case of Auction Market Preferred Shares, which failed in 2008, is covered in detail.
The decline of the dollar
By John Schroy, on March 30th, 2009 |

Foreigners hold $16.9 trillion in dollar financial assets, accumulated through years of selling goods and services to the US. Profligate deficit spending by the Pelosi-Reid Congress increases the probability of dollar inflation.
If foreign governments were to convert their holdings of dollar financial assets into non-financial assets, like US REITs, they can guard against dollar inflation. They might also gain a position that, in the extreme, would be against US national security interests.
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