Credit Default Swaps on the USA spiked this week up to 82 bps. That’s not an alarming move, but for a country whose CDS’s used to be at zero it’s interesting if nothing else. The swaps are up 25% since the end of November alone. As of now I am not one of these alarmists who think the U.S. is at risk of default. Far from it. I am also not naive to the incredible problems we face (which is why I was bearish 2 years ago, 100% cash heading into the crash and remain bearish). We are still the most innovative, entrepreneurial and truly free nation in the world. No other system provides the opportunity for free market growth that ours does. Assuming our government begins to get our finances in order (which I am confident Obama will do) we can expect things to have normalized 5 years out.

Besides, if USA Inc. goes out of business, I’d hate to see what happens to the rest of the world….