by Calculated Risk on 11/02/2008 02:39:00 PM

Bill Fleckenstein writes: Economy sinks as we save bankers

I am much more concerned about jobs and the economy (as well as a future funding crisis I'll explain below) than I am about this phase of the financial crisis.

I could be wrong, of course, but I think we're probably in about the eighth inning of the crisis in financials.

In that "future funding crisis" Fleck is concerned about funding the U.S. debts - even to the point of having to borrow in foreign currencies.

The third crisis that I see coming, which is theoretical but I suspect cannot be avoided: At some point, the U.S. will not be allowed to finance all of its debts in dollars. We have proposed better than $1 trillion worth of bailouts, and there will be more money thrown at the economy, I'm sure. ... Thus, somewhere down the road, we might have to borrow in foreign currencies, which would cause an additional set of problems.

This is similar to my post yesterday were I discussed a possible vicious cycle that could push up intermediate and long interest rates as the U.S. tries to find funding next year - although I don't think the U.S. will be forced to borrow in foreign currencies. The U.S. isn't Argentina, at least not yet.

Fleck concludes:

To return to baseball metaphors: As I said earlier, I believe the credit crisis is probably in the eighth inning. The economic crisis is still taking batting practice. As far as the funding crisis goes, I don't think folks even realize that game is on the schedule.