German Finance Minister Wolfgang Schaeuble questioned today how the United States can deal with its high levels of government debt after November's presidential election, reports Reuters.
In a speech to the Bundestag lower house of parliament to open a debate on the 2013 German budget, Schaeuble said worries about U.S. debt were a burden for the global economy, hitting back at Washington which has criticized Europe for failing to get a grip on its own debt crisis.
In private, Reuters says, German officials often express concern about U.S. debt levels and the inability of politicians there to reach a consensus on how to reduce it, but Schaeuble's public remarks underscore the extent of the worries in Germany.
"Ahead of the election in the United States there is great uncertainty about the course American politics will take in dealing the U.S. government's debts, which are much too high," Schaeuble said. "We need to remind ourselves of that sometimes and the global economy knows that and is burdened by it."
It's not only German officials who are concerned with debt levels. Former senior finance officials in the U.S. have indicated grave concern to me about U.S. government debt levels. Major inflation or default are the only two ways they see out for the U.S.
Bottom line: This is no time to own long term U.S. bonds/