Two More Things 2012 Will Bring

Capital will flee the U.S. more quickly as this and other taxes rise in the future — to pay for government spending. It's as if Uncle Sam didn't want us to invest in stocks and business. He'd rather we buy his bonds at a paltry 2% and take a loss due to inflation being 6–8% or higher. But these bonds have not only price risk but their default and inflation risk go up when the economy slows. As I say, capital will be looking elsewhere for places to invest.