Of course, we have been talking about this since the original Death of the Dollar in 2006 and earlier on Resonance FM.
HSBC conceded yesterday that its purchase of Household International, the US sub-prime lender, had been a $15 billion blunder and would continue to drain the bank’s resources for another two years.
The full scale of the disaster was laid out for shareholders as the bank unveiled plans for a £12.5 billion rights issue to shore up its balance sheet.
Foreigners ain’t going to return to the US market for a long, long time. Obama, Geithner, Bernanke and Summers can toss all the dosh they want at their cronies on Wall Street, no bank anywhere in the world is going to ever buy any debt related to or collateralized by the US consumer until memories fail or the US consumer actually manages to secure decent wages (unlikely for this generation).
There is more and more alarm at US (& UK) economic policies. Alarm, of course, has a way of turning into stampedes or panics.