illusion8
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The case of the United States of America
Let’s be real and honest. If the US is not a military super-power, it would be
classified as a “Banana Republic.”
It is a bankrupt country and is the world’s biggest debtor in the amount of
US$ outstanding to foreign creditors!
This is not in dispute by all the experts. Just Google “which country is the
biggest debtor?” and the answer is the US (source: IMF)! As at 2013, the
total national debt is over US$16.805 trillion which is larger than the
country’s GDP! When we include the unfunded liabilities, some experts
have calculated the debt to be over US$100 trillion. The US is a zombie
debtor – walking DEAD.
There is just no way for the US to pay off the debt. It is mathematically
impossible to repay the debt even if the US government were to raise taxes
by 200 per cent! But, that would not be acceptable by the people and would
spark off a revolution in the US.
So by any measure, any bonds issued by the US treasury ought to be classified
as “Junk” and a hefty interest would have to be paid to creditors to buy the
bonds.
The US$ trillion question to be asked is, “Why have foreign creditors lent so
much money to the US when it is in such a hopeless financial mess?”
Many reasons have been put forward, but let’s cut out all the crap and get real.
The main reason is that these foreign creditors (stupid corrupt governments) just
don’t understand how the scam has been perpetrated.
The world believed that fiat money (especially the US Dollar) which is backed
by nothing except the good faith of the issuer is better than gold and is
genuine money for all intent and purposes. The foundation for the acceptance of
fiat currency as money is confidence and the artificial demand that has been
created to inculcate such confidence.
In summary, as a result of the loose monetary policy started by Alan Greenspan,
the predecessor of “Helicopter” Bernanke, several economic bubbles were
created – the housing bubble, the stock market bubble, the Private debt
consumption driven bubble which popped one after another in 2008.
Additionally, there was also the Shadow Banking Bubble (which no one
mentions because so few understand the mechanics of Shadow Banking and the
derivative casino).
In the result, the US became bankrupt. The music stopped and the champagne
party was over. US$ trillions were wiped out. Families lost their homes through
foreclosures, businesses collapsed and massive unemployment was the result.
Millions were on food stamps (over 40 million Americans). So, who can we blame
for this financial fiasco? Well, it must be the FED and the US Treasury who like
“Lucky” Jim was able to print (digitally) so much money, thereby flooding the
market with cheap credit and this was multiplied many, many times as a result of
fractional reserve banking (which allows banks to create money out of thin air –
10 times customers’ deposits) and speculation in the global derivatives casino.
It was a financial orgy that defied all common sense and logic.
The US Treasury was bankrupt, but they needed to borrow more money, much,
much more money to survive. At first, the foreign creditors like stupid China
and Japan were willing to come forward to help the US as the cheap credit
intoxicated American consumers were the biggest spenders / purchasers for their
exports. The US was the largest consumer market in the world.
But, the financial status of the US has descended to that of a “Banana Republic."
The US succeeded in getting a AAA rating because it was a scam as all the
world’s rating agencies were US rating agencies and why would they stop the
music and end the party when such AAA ratings (fraudulently given) would
generate US$ billions in profits and have generated such profits for a decade or
more!
The Scam (read up on how the hoodwinking happened)
http://futurefastforward.com/images/stories/financial/Buying_US_Treasury_Bonds.pdf
Let’s be real and honest. If the US is not a military super-power, it would be
classified as a “Banana Republic.”
It is a bankrupt country and is the world’s biggest debtor in the amount of
US$ outstanding to foreign creditors!
This is not in dispute by all the experts. Just Google “which country is the
biggest debtor?” and the answer is the US (source: IMF)! As at 2013, the
total national debt is over US$16.805 trillion which is larger than the
country’s GDP! When we include the unfunded liabilities, some experts
have calculated the debt to be over US$100 trillion. The US is a zombie
debtor – walking DEAD.
There is just no way for the US to pay off the debt. It is mathematically
impossible to repay the debt even if the US government were to raise taxes
by 200 per cent! But, that would not be acceptable by the people and would
spark off a revolution in the US.
So by any measure, any bonds issued by the US treasury ought to be classified
as “Junk” and a hefty interest would have to be paid to creditors to buy the
bonds.
The US$ trillion question to be asked is, “Why have foreign creditors lent so
much money to the US when it is in such a hopeless financial mess?”
Many reasons have been put forward, but let’s cut out all the crap and get real.
The main reason is that these foreign creditors (stupid corrupt governments) just
don’t understand how the scam has been perpetrated.
The world believed that fiat money (especially the US Dollar) which is backed
by nothing except the good faith of the issuer is better than gold and is
genuine money for all intent and purposes. The foundation for the acceptance of
fiat currency as money is confidence and the artificial demand that has been
created to inculcate such confidence.
In summary, as a result of the loose monetary policy started by Alan Greenspan,
the predecessor of “Helicopter” Bernanke, several economic bubbles were
created – the housing bubble, the stock market bubble, the Private debt
consumption driven bubble which popped one after another in 2008.
Additionally, there was also the Shadow Banking Bubble (which no one
mentions because so few understand the mechanics of Shadow Banking and the
derivative casino).
In the result, the US became bankrupt. The music stopped and the champagne
party was over. US$ trillions were wiped out. Families lost their homes through
foreclosures, businesses collapsed and massive unemployment was the result.
Millions were on food stamps (over 40 million Americans). So, who can we blame
for this financial fiasco? Well, it must be the FED and the US Treasury who like
“Lucky” Jim was able to print (digitally) so much money, thereby flooding the
market with cheap credit and this was multiplied many, many times as a result of
fractional reserve banking (which allows banks to create money out of thin air –
10 times customers’ deposits) and speculation in the global derivatives casino.
It was a financial orgy that defied all common sense and logic.
The US Treasury was bankrupt, but they needed to borrow more money, much,
much more money to survive. At first, the foreign creditors like stupid China
and Japan were willing to come forward to help the US as the cheap credit
intoxicated American consumers were the biggest spenders / purchasers for their
exports. The US was the largest consumer market in the world.
But, the financial status of the US has descended to that of a “Banana Republic."
The US succeeded in getting a AAA rating because it was a scam as all the
world’s rating agencies were US rating agencies and why would they stop the
music and end the party when such AAA ratings (fraudulently given) would
generate US$ billions in profits and have generated such profits for a decade or
more!
The Scam (read up on how the hoodwinking happened)
http://futurefastforward.com/images/stories/financial/Buying_US_Treasury_Bonds.pdf
China remains the largest foreign creditor of the United States after it increased its holdings of US treasury bonds by $19.7 billion in December, data released by the US Treasury Department showed on Friday.
December was the third-consecutive month in which China increased its holdings of US Treasury securities.
A total of $1.202 trillion in US treasury bonds were held by China at the end of 2012, compared with the $1.183 trillion in November, and the $1.151 trillion at the end of 2011.
Japan, the US' second-largest creditor, also increased its holdings of US treasury bonds to $1.12 trillion in December.
At the end of December, US treasury bonds held by major foreign creditors totaled $5.56 trillion, higher than the $5.54 trillion in November, and an increase for the 12th consecutive month.
http://www.chinadaily.com.cn/business/2013-02/18/content_16233876.htm
