trading journal 1: the national debt issue

This marks the official unveiling of long-awaited Richard's trading journal series where various trading techniques and research materials are discussed and probed here over the course of my trading career. Today we will focus our attention on the interesting phenomenon of US national debt issue, which is a macroeconomic problem affecting everyone including traders.

an article on optionetics today (http://www.optionetics.com/articles/article_full.asp?idNo=15143) details the perils of national debt of US which is at a massive level. It warns that economists are alerted to sign of unstability cause of rising interest rate in the U.S. Basically, a viscious cycle of foreign tighting of fiscal policy -> us treasury loses attractiveness -> higher interest in us -> deteriorating economy performance in US -> us market crash.

It goes on to discuss on great powers of the past have all been big lenders of the time. US today, it seems, is nothing but a huge shell wielding scary swords at weak buddies. so must trading a bit cautiously it seems, However it still is a macro issue and serves only as the peripheral concern for mid range trading.