Today and 30 Years Back ...

Today the USA is spending nearly $ 600 billion more a year than it produces. Almost 6% of its annual gross domestic product!

Much of that spending has been financed by Asian countries, which have bought more than $ 1 trillion in USA treasury securities and other dollar assets over the past years in order to help keep the dollar strong against their own currencies and keep their exports to the USA steady.

But, how long can they keep on doing that?

On the other hand, back in 1974 the USA was also running large budget and trade defficits. Then, as now, the USA was also bogged down in a costly war. And in 1974, a few months after the dollar plunged against the German Mark and the Japanese Yen, oil prices soared.

So, just remember the inflation we saw in the '70s and all the ill effects in growth ...

That was the worst period since World War II ...

Do You Hear any Bells?