Pictures Are Worth A Thousand Words

While reading Berkshire's 2006 Annual Shareholder Letter, I found a reference to the United States' foreign investment income and its relationship to our payments on foreign holdings of US securities.

Digging deeper into the issue, I found this graph on the internet. A quick look at the graph and it's easy to see why I'm taking the short position on the American dollar.

Kinda scary...


The United States is beginning to spend more and more of its "income" to pay-off its loans, (which come in the form of bonds owned by foreign countries). And to make things worse, we're also earning less and less on our foreign investments.

What this means is that more and more of our country's paycheck is being used to pay off our foreign debt, instead of being spent in [fill in the blank].