Construction economic forecast
Economic recovery in 2009-10, but problems beyond.
According to Reed
Construction Data reports from Jim Haughey , the treasury's AAA credit rating
was properly taken for granted until a few months ago. Indeed, the whole
structure of interest rates used Treasury debt as the risk free, base, interest
rate with other rates calculated as premiums or spreads over the Treasury rate.
The U.S. dollar was long used as the prime international reserve currency. U.S.
Treasury debt was the safe have for foreign investors willing to accept a low
rate of return in exchange for avoiding default risks in debts denominated in
Now the massive borrowing by
the Treasury in the last few months has put the traditional international role
of the U.S. dollar in question. We have worried about this happening for years.
But it never happened. Every crisis led foreign investors and governments to
bring money to the United States
for safekeeping. Other countries had to make painful spending cutbacks
periodically after spending binges, but the United States has been spared
because of its unique role in international finance and sufficient borrowing