Outsized US debt spells big trouble

By Adam Porter in Perpignan, France
Wednesday 26 January 2005, 19:00 Makka Time, 16:00 GMT

All these fiscal demands cut into US pockets. The result is an indebted US public is facing higher, not lower, costs of living. The higher costs of fuel, commodities and real estate means that in turn the Fed may well be forced to raise rates, and fast.

As Roach says, “a sharp increase in US interest rates spells game over for a now-over-extended US housing market. The asset economy has gone to excess, and it is high time to face the endgame, before it’s too late”.

Al Jazeera