China is Now a Net SELLER of U.S. Treasury Notes and Bonds!
We told you this was coming. Heck: A blind man could have seen it a mile away.
For many months now, we’ve predicted that Washington’s wild spending and borrowing spree would make the global investors who buy our longer-term Treasuries — notes and bonds — as nervous as long-tailed cats in a room full of rocking chairs.
We’ve cautioned you that our sky-high deficits, record shattering borrowing by the U.S. Treasury and runaway money printing by the Federal Reserve would cause them to lose sleep, worrying about the real return on their money — not to mention, the return OF their money.
We forecast that as these concerns deepened, they would reduce the amount of money they were willing to loan Washington … or stop loaning us money altogether … or even begin selling the longer-term Treasuries they already own.
Now, those forecasts have begun to come true — in spades!
Just a few days ago, the U.S. Treasury Department revealed that China actually REDUCED its note and bond holdings by $25 billion in June. Although China did NOT sell shorter-term Treasury bills — and isn’t expected to — it’s still the largest amount of Treasuries China has ever sold in a single month.
Are we financial sado-masochists?
I get almost giddy reading these stories, and WHY? I certainly do not want to see my nation go through the traumatic changes that appear both inevitable and imminent. I have a few shiny trinkets that will increase in value, so what? If nothing else, I have learned that items of "real value" are water fit drink, food fit to eat, and air fit to breathe. I sent out an "I told you so" email to a few political connections, and while there is always a bit of egotistical satisfaction in a good "I told you so" this was the least satisfying one I have ever indulged. Indeed, I only indulged it in the faint hope that perhaps some of them would finally see through the web of lies.
It is not that I sit well prepared to weather any storms, I squandered my time, money and energy on trying to wake and warn my neighbors. I now expect to be thanked for that with a bullet or handcuffs at some point, a good tazing at the least. S fotill, I do not wish these people harm, I just wish they would wake up, and wake up in time to stop it.
Maybe that is why I get giddy. I have very little store of "hope" and squander little of it on the masses these days; I have accepted that the only thing that will wake them up is what put them to sleep, and I am in no position to take over the media. So when I see the media forced to spit out the truth, even if it is only on the back page of "The Podunk Every Other Daily" I allow myself a fleeting glimmer of hope for the shleeple. Maybe if their god tells them the truth they will hear it?
Truth exists, and it deserves to be cherished.
Here is a link to graphs on
Here is a link to graphs on China's holdings of U.S. treasuries:
http://tontinecoffee.blogspot.com/2009/09/china-is-selling-u...
Over the past year China has been growing their holdings of U.S. treasuries at an ever decreasing rate and is now reducing their holdings of U.S. government debt as of June.
I hope this nation wakes up soon. I don't know how long we can borrow money at this ridicules pace; I don't want to find out.
-_-
"So what’s next? Will China dump the rest of its estimated $876 billion hoard of U.S. Treasuries and crash the Treasury market — and by doing so, kill the U.S. dollar, drive interest rates sky high and leave the U.S. economy a smoking ruin?"
This begs the question, who are they going to dump the rest of their 876 billion dollar holdings ON?
I believe that's part of the
I believe that's part of the problem. What happens to the price of an asset that is for sale but nobody wants to buy it at the current price? The price is reduced (if they really want to sell) and in this case that means a dollar which is considered to be less valuable.
...
they exchange them for oil.
they exchange them for oil. minerals gold and silver.. they do this slowly but surly... it will not be an over night thing..
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
It's not an overnight thing eh?
So how long will it take Grand Seer? 85 days?
Hmmm. Lets see...
1) China continues its policy of diversification of its foreign reserves by investing in hard assets
2) China announces repeatedly that the current US policy is unsustainable and undesirable
3) China requests the G-20 to consider a global reserve currency to replace the US Dollar such as IMF Strategic Drawing Rights
4) China announces it will allow its institutions to default on CDS's & CDO derivatives.
5) China begins encouraging its average citizens to invest in gold and silver.
6) China becomes a net SELLER of US Treasuries.
Hmm... I don't know about you, but this points in only ONE direction:
a) Death of the Dollar as a world reserve currency (and hence as a domestic currency)
b) A hyper-inflationary depression as those trillions of dollars start coming home
c) Further collapse of the banking system as CDO and CDS holders don't get paid on China's default
Those are not multiple choice, we will get all of them.
The Federal response? Most likely a false flag operation designed for two objectives:
1) instituting some form of emergency governing environment, maybe but not necessarily including martial law in larger cities
2) a pretext for yet another war, this time all out, via Congressional declaration most likely in the middle east. (Pakistan and Iran come to mind)
The Public response, unless a war is declared, and maybe even regardless, will be revolution. They will not accept continued destruction of the nation and emergency powers as a response.
The only way to avoid revolution is for States to:
1) begin nullifying Federal activities that are unconstitutional
2) declare Gold & Silver the only tender in payment of debt
3) recharter all banks within their borders as State banks outside the FED system and without FDIC oversight
4) Revitalize the State Militia system, refusing to allow Federal control over any portion of the organized or unorganized militia. (State and National Guard)
5) require all Federal tax dollars be submitted to the State Department of Internal Revenue and then only remit what is needed for Constitutional funding on an apportioned basis.
If those are not done, or do not work, the only way to avoid revolution is to then declare the government a failure and secede from the Union.
If the Federal Response to secession is negative and troops are dispatched, then the only response left to that state is to acknowledge that a state of war exists between it and the District of Columbia. All war efforts should be focused on destroying the District's war making ability on that State. (it is imperative to not be at war with other states, only the District - else things get messy fast)
But how can they fight a war without a means of financing it ?
x
On the issue of war with the District of Columbia
Unfortunately, some States will not secede and will send troops to put down the attempted secession of others, and we then have Civil War all over again. In a state like Missouri where I am, the division is between the cities and the rural areas, so we would have a great internal struggle, and I think this would be the case in many areas of the country. We all would soon find out that Civil War is not as much government against the people or government against government, but principally is people against people.
I bet that if you looked at the Brady anti gun sight's ranking of states the top half of the list would support the District of Columbia in such a war, and the bottom half would be at war with the District of Columbia.
And I certainly don't like the suggestion that all Federal tax dollars be submitted to the States. It would hardly be worth my time and effort to risk my life fighting the District of Columbia and some misguided yahoos from another state that side with the DC only to continue the present system of plunder and control, just substituting State plunder for Federal plunder.
But it is an interesting analysis. Don't think it is correct on hyperinflation though. If the market for federal debt dries up, except for FED purchases, the value of all debt instruments on the asset side of banks' books would collapse as interest rates skyrocket, and the banks would quickly become insolvent, wiping out checking and savings accounts, thus decimating the money supply. What are you going to use to pay for things? And, if people run the banks, which I think they would, it takes away the ability of banks to expand the money supply.
"The deepest sin against the human mind is to believe things without evidence." Thomas H. Huxley
I understand your take on a civil war
it is very plausible what you say. But I'm not so sure that States would be so eager to support DC. It could be that those States which are heavily dependent on Federal subsidy might, but I think that would be about it.
As for remitting Federal Tax dollars to the States first rather than to the IRS, that is from a bill proposed in Georgia right now. The state legislature would have under that bill the authority to spend that money in that state, but they would also have the authority to return it to the taxpayers. I would think that this would be sold such that constituents would make it very difficult for the legislature NOT to give the money back. Most state budget problems come from unfunded Federal mandates. I don't see a legislature as withholding funds for non-constitutional policies as agreeing to fund any mandates with the left overs. Handing out money to constituents gives legislators lots of clout come election day. It would be very difficult for them to just spend the money.
Additionally, the Federal government sets the tax rates. So it is still Federal plunder, the State is just acting as intermediary to prevent any of it from being spent on unconstitutional programs. In reality, it would end the plunder.
Concerning bank collapse and hyper-inflation. What I think we will see is the collapse of credit as you suggest, which will be met with outright printing press frenzy to compensate. That or outright nationalization of all banks. DC will not allow the monetary system to dry up. They will make direct handout payments if necessary in one form or another. The effect will be the same regardless. DC has a proven propensity to do whatever it takes to avoid deflation. I don't doubt that this will continue.
They have also
been using their currency reserves to acquire physical commodities and ownership stakes in energy and mining ventures all over the world. They have been actively diversifying out of the US Dollar for several months now, but in ways that do not attract as much attention as this US Treasury holdings statistic. The cat is clearly out of the bag.
yes Gil and people like you
yes Gil and people like you and I have been warning about this for a very long time... but some people.. se NEOFOOL below.. just don't get it.. all we are trying to do is to get the info to people so hopefully they will take measures to protect themselves and their family. but NEOFOOL ,for some reason can not figure that out.. the past couple months has shown that what people have been talking about was right...
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
Yes
You are such a prophet. How DARE those idiots like NEOFOOL and others EVER question your authority. They are just too STUPID to understand how simple it really is. Bad_Karma is RIGHT and they are WRONG so they should just shut their noise holes right NOW.
so now the Fed/government
so now the Fed/government monetizes its debt... didn't Ron Paul say INFLATIONARY depression??? and still some fools don't believe him.
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
Yes, those stupid morons.
How DARE they have an opinion counter to yours. Now that you have totally owned them with your vast pool of knowledge they will know to shut their stupid little noise holes, most especially whenever you are laying down your decrees.
lol......... you are to
lol......... you are to funny...
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
they won't listen... some
they won't listen... some people here who are supposide Ron Paul supporters do not want to make the tough call and say that the Government of the US is sick.. To call a spade a spade and admit that those chinese peasants out in the middle of their rice patties are kicking our asses.. OH! NO , NOT THE GOOD OL USA.. DUHHH CHINA NEEDS US MORE THEN WE NEED THEM... some of the dumbest, ignorant things I have seen written are here on the dailypaul.. now slowly but surly, people are starting to see what has been presented to them over the last 2 years is starting to be revealed.. wether it is the silver manipulation, the real unemployment numbers, inflation numbers etc. etc. etc... now all the sudden the fools who sat and told us how gold was set for a tumble, or that the economy was going to be just fine, are now seeing what they have been taught is correct.. this is a downward economic sprial.. this artice just goes to show that some communists know the game of capitalism better then the idiots in DC do..
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
>_<
Yes, hyperinflation has totally occurred just as you predicted. How DARE anyone question you or think for themselves! Stupid peasants indeed!
dude... you don't have a
dude... you don't have a clue...
A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.
Oh Sierra Master Clue giver
I know. I'm so sorry that I have hid from the clues you've tossed from your clue train as you drive off into the happily ever after of preparedness. How ever can I be forgiven by your majesty? Perhaps if I recant all my previous thoughts I call my own and lick your boots and regurgitate everything Jim Sinclaire says I will find forgiveness in your eyes!