Guten tag deutschmark!

RIO RANCHO, New Mexico (Reuters) -

President Barack Obama raised the prospect on Thursday that China and other nations could stop buying U.S. debt and said the United States needed to tackle its deficit to avoid long-term economic damage.

"The long-term deficit and debt that we have accumulated is unsustainable. We can't keep on just borrowing from China or borrowing from other countries," Obama told a town hall meeting event in New Mexico.

"We have to pay interest on that debt and that means that we're mortgaging our children's future with more and more debt," he said.

China is the single largest holder of U.S. debt and owned $744 billion worth of U.S. government securities at the end of February, the latest month for which data is available, according to the U.S. Treasury.

Obama said the debt situation would create greater economic problems if foreign countries like China lost their appetite for U.S. treasuries.

"What's also true is at some point they're just going to get tired of buying our debt," he said.

"And when that happens, we will really have to raise interest rates to be able to borrow and that will raise interest rates for everybody."

The White House estimated earlier this week the U.S. budget deficit will be $1.84 trillion for the fiscal year that ends September 30.

Obama has pledged to halve the U.S. deficit within four years despite implementing economic stimulus measures that will make it larger in the short term. Source: NY Times

First, Mr. NY Times, exactly what is "short term" about $1.84 trillion dollars?

But more importantly, I think most people are misidentifying what he is doing/saying here. Most of the commentary I've heard is shock that he would essentially throw his own policies under the bus like this, after all he IS condemning the very thing he is doing. But that's not it. What he is doing in my estimation is prefacing the "emergency need" to RAISE TAXES. That's all this is about ... we will be told we need to make sacrifices, all pitch in, be our brothers keeper, spread the responsibility around, and so on And all of that translates into 1 thing and 1 thing only: raising taxes.

Nice plan huh? Come in double the budget, massively increase the deficit in your first 100 days and then cry about how much debt we have, which demonstrates the need to raise taxes.

When he came into office there was about $800 billion dollars in fluid US currency (China "stores" the money we pay them as a sort gold standard/reserve, so I'm not counting that money). Now the amount out there is estimated to hit $2 Trillion as Obama's spending activates. The Wiemar Republic, do you know when their economy finally gave way to all of the financial hemorrhaging? When the available currency was artificially quadrupled by the government. We are now just above double.

I'd invest in a wheel barrel if I were you ... it'll make it easier to pick up your pay checks.