printThe political class yaks about the fiction of our dependency on foreign oil markets, exploded in “The Goods On Gas.”
We are to believe that, while gas trading is oh-so dangerous to America’s national security, accruing debt and selling it to China—that’s just dandy.
China, reports Bloomberg.com, is worried that its “Treasury holdings [will] be eroded by “reckless policies.”
I wonder whose?
BAB readers will know that “China, the U.S. government’s largest creditor, is ‘worried’ about its holdings of Treasuries and wants assurances that the investment is safe.”
“We have lent a huge amount of money to the United States,” Premier Wen Jiabao said at a press briefing in Beijing today. “I request the U.S. maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Honor? Come again!
“White House National Economic Council Director Lawrence Summers, asked about Wen’s remarks, said overseas ‘confidence’ in Treasuries would be hurt without the administration’s steps to end the economy’s decline. President Barack Obama is relying on China to sustain buying of Treasuries amid record amounts of debt sales to fund a $787 billion stimulus package.”
China is enabling Barack as it did Bush. The only reason it doesn’t put an end to the US’s spending addiction is that it stands to lose a lot if it does:
“‘China won’t sell the U.S. debt now as that will only drive down Treasury prices, hurting not only the U.S. but also the value of its own investments,’ said Shen Jianguang, a Hong Kong- based economist at China International Capital Corp., an investment bank partly owned by Morgan Stanley”
“‘China’s purchases of American debt have been one of the few bolts keeping the wheels on the global economy,’ said Phil Deans, a professor of international affairs at Temple University in Tokyo. ‘If China stops buying, where does Obama’s borrowing to fund his stimulus come from?’”
This reminds me how brain dead are the Sinophobes. Beggars can’t be choosy, and they most certainly can’t afford to be as arrogant as the US is.
The writing is on the wall. Eventually our foreign creditors will wise up and stop buying US bonds. When that happens, the Fed will step in and create the money to monetize the debt (beyond what they’re already doing), resulting on a run on the dollar.
That’s when it’s really going to hit the fan. Hyperinflation will likely ensue, making stagflation in the Carter years look like a walk in the park.
Next up: price and capital controls, which will give us shortages, rationing, long lines for staple goods, black markets, and bartering.
We’ll see further infringements on civil liberties due to rioting and skyrocketing crime rates. They’ll use this as a pretext for gun confiscation and martial law.
When all else fails, our government will do what all governments do when they’ve ruined the economy: start a war to divert attention. I predict Iran will be the target.
Buy gold, store up on canned goods, and get yourself a gun and learn how to use it. You’ll need all of these things to ride out the looming storm.
The likely trigger of the final economic tsunami will be the demographic time bomb of Socialist inSecurity and Medicare for the “elderly”. Even if we make it through the current Bush/Obama bailoutism for the next decade, the massive entitlement burden in 2020 added to the $20 trillion plus national debt is truly frightening.
That “crisis” will make 2009 look like a Sunday school picnic.