If you're watching the financial markets at all (and especially if you have US dollar investments), take a look at these articles. The first one is about how credit card delinquencies are at an all-time high in the US. This situation is blamed on the rising price of gas; not mentioned is that the minimum monthly credit card payment is going to double in October:

"As the tougher bankruptcy law approaches, it's feeding a 'perfect storm' of financial crisis as the credit card industry moves to impose higher minimum payments for card balances. Bank of America started the trend last year, and several other giants, including Discover, Citigroup and MBNA, have followed suit, raising monthly minimums from 2 or 2.5 percent of the balance to the 4 percent range.

For a household carrying credit card debt of $9,000 -- the national average -- that means a monthly payment jumping from $180 to $360."

The other article to read is about the repo markets. In addition to providing a good explanation of how these markets work, the author brings up some cultural differences between the Far East and the Western markets, and how that could create some problems in the not-so-distant future. Here are a few excerpts:

A repo squeeze occurs when the holder of a substantial position in a bond finances a portion directly in the repo market and the remainder with "unfriendly financing" such as in a tri-party repo. Such squeezes can be highly destabilizing to the credit market.

The direct dependence of derivatives financing on the repo market is worth serious focus. According to Greenspan, 'By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.'
...

Greenspan acknowledged that derivatives, by construction, are highly leveraged, a condition that is both a large benefit and an oversized Achilles' heel. It appeared that the benefit had been reaped in the past decade, leading to a wishful declaration of the end of the business cycle. Now we are faced with the oversized Achilles' heel, with "the possibility of a chain reaction, a cascading sequence of defaults that will culminate in financial implosion if it proceeds unchecked". According to Greenspan, "only a central bank, with its unlimited power to create money, can with a high probability thwart such a process before it becomes destructive. Hence central banks have, of necessity, been drawn into becoming lenders of last resort."
...

The individual management of risk, however sophisticated, does not eliminate risk in the system. It merely passes on the risk to other parties for a fee. In any risk play, the winners must match the losers by definition. The fact that a systemic payment-default catastrophe has not yet surfaced only means that the probability of its occurrence will increase with every passing day. It is an iron law of an accident waiting to happen understood by every risk manager. By socializing their risks and privatizing their speculative profits, risk speculators hold hostage the general public, whose welfare the Fed now uses as a pretext to justify printing money to perpetuate these speculators' reckless joyride.

What kind of logic supports the Fed's acceptance of a 6% natural rate of unemployment to combat phantom inflation while it prints money without reserve, thus creating systemic inflation to bail out reckless private speculators to fight deflation created by a speculative crash?

While individual investors can't hedge their bonds with repos, it may be a good time to consider diversifying into non-dollar denominated instruments. And if if you take Greenspan's comment this weekend seriously (that the United States has "lost control" of its budget deficit), you may even want to buy some gold.