The flight from US treasuries, equities and the dollar is a category five hurricane against the once safe haven. Is it fear of hyperinflation or just a ripple of the recession?
Speculation is increasing that the US will not be able to pay off its mounting debt and it is showing in the markets. Most currencies, especially commodity driven ones like the Australian and Canadian dollar, are rallying. The US treasury bonds are selling off at an alarming rate. The stock market is starting to either consolidate or make a larger move down.
If the hyperinflation hits and creates a panic, this type of activity will increase markedly. If instead this is a ripple from the recession tarnishing the confidence of other markets it is still a negative because it shows that central banks around the world are not supporting US debt to the degree that they did in the past during a time when the US is creating more debt than ever before.
The implications are vast and will have an effect on purchasing power, employment, wages and the types of jobs available moving forward.