Editor's note: This piece was updated to include a chart by Institutional Investor's Sovereign Wealth Center.
NEW YORK ( TheStreet) -- Dana Blankenhorn says without oil, we'd be Greece. I say, without artificially cheap Treasuries (that's cheap money for the U.S. Treasury, expensive for investors), we'd be Greece. Large "purchases" of U.S. Government Debt by the Federal Reserve system, at yields that are well below core inflation, induce other market participants to purchase, hold and trade Treasuries, when they should run away. This is all going to change, in my opinion. (My last article explains the vulnerability of the Fed in some detail.)
For decades the United States retained one competitive edge we may soon surrender -- the unchallenged ability to turn accounting entries into stores of value by printing new Federal Reserve Notes. Without this advantage, America is even weaker than Greece, as we have daunting liabilities.
Everyone is concerned with a U.S. default of its debt, but America has long been "defaulting" by repaying investors who purchased our debts years ago with dollars that steadily have declined in value. Do we really think the American Dream remains alive forever, if we relentlessly crush the worth of our currency?America has been a net importer for decades. A weak dollar may help the trade deficit but it will slaughter the capital balance, particularly given the confidence destroying recent history exhibited in political battles across America. Unless Americans rise up and demand rapid, responsible change in the way we run our collective finances, the fate of our country is not as bad as Greece -- it is likely far worse. For lack of a better alternative, global investors and political leaders have grudgingly accepted "dollar dominance" even as they question the financial position of our Federal Reserve System and the credit quality of our Federal Government. How much longer can the Fed serve as "buyer" of last resort for U.S. Government debt securities, priced at unrealistically low interest rates, to fund our yawning deficits? Startling change could come swiftly, when the largest foreign investors in the world revolt and work together to create an alternative to the Federal Reserve and other troubled Central Banks. After all, they have built up mammoth financial resources. I believe it really could happen.