Comments on: Is America still depression-proof? http://economiccrisis.us/2009/08/america-depressionproof/ news, analytics, recommendations Thu, 09 Feb 2012 07:31:20 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Gerald Spencer http://economiccrisis.us/2009/08/america-depressionproof/comment-page-1/#comment-614 Gerald Spencer Fri, 04 Sep 2009 22:27:52 +0000 http://economiccrisis.us/?p=6931#comment-614 Other countries view the United States of America as borrowing and spending huge amounts of freshly printed paper money with the careless abandon of a drunken sailor on shore leave. This is very disturbing to those very same foreigners that the US government hopes will buy some more of our freshly printed US securities (hopefully at not too much of a discount and/or of high interest rates) to pay for our economic stimulation, our trade deficit, our wars, our environmental activities, and other various government expenses. The Chinese, Indians, Pakistanis, and Brazilians are very industrious people that have created a continuous flow of incoming US paper dollars that they earn from US importers (Wal-Mart, Home Depot, NTB, GM, Ford, GE, Chrysler, Dell, and etc.). A small portion of these freshly printed paper T-Bills, US Bonds, etc. are bought by US citizens and US organizations. The US government wants these industrial nations to spend their US dollars to purchase the freshly printed paper T-Bills, US Bonds, etc. at the periodic US Federal Reserve auctions. These foreign industrial countries are now offering less and less than the face value of our freshly printed-paper T-Bills, US Bonds, etc. as the industrial nations confidence in the USA economic system diminishes. As the USA runs out of real estate, businesses and other assets in the USA to sell to those people in return for the wealth (T-Bills, US Bonds, etc.) that they created by working to manufacture the things that US citizens consumed, these productive industrial nations will then pay less and less US dollars for our freshly printed paper T-Bills, US Bonds, etc. that the US government wants them to buy. How did these industrialized nations get so much of our US currency, Dollars, T-Bills, Bonds, and other government securities? The USA importers and distributors (Wal-Mart, Home Depot, NTB, GM, Ford, GE, Chrysler, Dell, and etc.) paid the Chinese Companies with US currency to manufacture the things that they imported and then sold to the US consumers. China already is the USA's biggest foreign lender (creditor) of US Dollars to the US Government to pay government expenses. China owns an estimated $1 trillion of this U.S. government debt consisting mostly of freshly printed-paper US T-Bills, US bonds, US securities and etc. If China wants Gold instead of printed-paper currency, a weaker dollar will result. If the Industrial nations only wants to pay pennies on the dollar for any of our future freshly printed paper T-Bills, Bonds, Securities, currencies, etc., this will cause great inflation in the USA, and/or also cause great reduction of the buying power of the US dollar within the USA for imported products. If the foreigners only pay a few pennies on the dollar for our freshly printed US T-Bills, US bonds, and other US securities, then the USA will have to print up many times as much paper money, and the inflation could then become astronomical, ala Mexico. Chinese Premier Wen Jerboa stated, "Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried." Wen said at a news conference Friday (13MAR09) after the closing of China's annual legislative session. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets." This message is unlikely to be misunderstood at the White House. The USA government is counting on Beijing to loan the US government US dollars to pay for our TARP and economic stimulus packages by buying our freshly printed U.S. bonds (at hopefully close to face value) with the US dollars and other US currency that they earned from the USA population by manufacturing the things that the USA citizens imported and then consumed. If I owe the bank $500,000.00 and cannot pay, I am in real trouble. If I owe the bank $50,000,000.00 and cannot pay, the bank is in real trouble. China is probably worried that the future generations of US citizens will not re-pay the T-Bills and US Government Bonds that finances our non-productive high consumption US lifestyle of today, and our fast growing government expenses. The US government must have assets available for the foreigners to purchase with their freshly printed U.S. bonds or the foreigners will not buy our U.S. bonds on the next occasion that we print some more of these paper U.S. bonds. The USA is committing economic suicide! When and if foreign individuals and governments stop buying freshly printed US paper T-Bills, US paper bonds, and other paper US securities at Federal Reserve public auctions, and/or start buying these items at the foreign currency exchange equivalent of a few pennies on the dollar, the government checks, social security checks, government payroll checks, and private paychecks will then not buy very much food or anything else that we consume. Your life savings might only sustain you for a couple of weeks. Other countries view the United States of America as borrowing and spending huge amounts of freshly printed paper money with the careless abandon of a drunken sailor on shore leave. This is very disturbing to those very same foreigners that the US government hopes will buy some more of our freshly printed US securities (hopefully at not too much of a discount and/or of high interest rates) to pay for our economic stimulation, our trade deficit, our wars, our environmental activities, and other various government expenses.

The Chinese, Indians, Pakistanis, and Brazilians are very industrious people that have created a continuous flow of incoming US paper dollars that they earn from US importers (Wal-Mart, Home Depot, NTB, GM, Ford, GE, Chrysler, Dell, and etc.). A small portion of these freshly printed paper T-Bills, US Bonds, etc. are bought by US citizens and US organizations.

The US government wants these industrial nations to spend their US dollars to purchase the freshly printed paper T-Bills, US Bonds, etc. at the periodic US Federal Reserve auctions. These foreign industrial countries are now offering less and less than the face value of our freshly printed-paper T-Bills, US Bonds, etc. as the industrial nations confidence in the USA economic system diminishes.

As the USA runs out of real estate, businesses and other assets in the USA to sell to those people in return for the wealth (T-Bills, US Bonds, etc.) that they created by working to manufacture the things that US citizens consumed, these productive industrial nations will then pay less and less US dollars for our freshly printed paper T-Bills, US Bonds, etc. that the US government wants them to buy.

How did these industrialized nations get so much of our US currency, Dollars, T-Bills, Bonds, and other government securities? The USA importers and distributors (Wal-Mart, Home Depot, NTB, GM, Ford, GE, Chrysler, Dell, and etc.) paid the Chinese Companies with US currency to manufacture the things that they imported and then sold to the US consumers.

China already is the USA’s biggest foreign lender (creditor) of US Dollars to the US Government to pay government expenses. China owns an estimated $1 trillion of this U.S. government debt consisting mostly of freshly printed-paper US T-Bills, US bonds, US securities and etc. If China wants Gold instead of printed-paper currency, a weaker dollar will result.

If the Industrial nations only wants to pay pennies on the dollar for any of our future freshly printed paper T-Bills, Bonds, Securities, currencies, etc., this will cause great inflation in the USA, and/or also cause great reduction of the buying power of the US dollar within the USA for imported products.

If the foreigners only pay a few pennies on the dollar for our freshly printed US T-Bills, US bonds, and other US securities, then the USA will have to print up many times as much paper money, and the inflation could then become astronomical, ala Mexico.

Chinese Premier Wen Jerboa stated, “Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried.” Wen said at a news conference Friday (13MAR09) after the closing of China’s annual legislative session. “I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets.” This message is unlikely to be misunderstood at the White House. The USA government is counting on Beijing to loan the US government US dollars to pay for our TARP and economic stimulus packages by buying our freshly printed U.S. bonds (at hopefully close to face value) with the US dollars and other US currency that they earned from the USA population by manufacturing the things that the USA citizens imported and then consumed.

If I owe the bank $500,000.00 and cannot pay, I am in real trouble. If I owe the bank $50,000,000.00 and cannot pay, the bank is in real trouble. China is probably worried that the future generations of US citizens will not re-pay the T-Bills and US Government Bonds that finances our non-productive high consumption US lifestyle of today, and our fast growing government expenses. The US government must have assets available for the foreigners to purchase with their freshly printed U.S. bonds or the foreigners will not buy our U.S. bonds on the next occasion that we print some more of these paper U.S. bonds.

The USA is committing economic suicide! When and if foreign individuals and governments stop buying freshly printed US paper T-Bills, US paper bonds, and other paper US securities at Federal Reserve public auctions, and/or start buying these items at the foreign currency exchange equivalent of a few pennies on the dollar, the government checks, social security checks, government payroll checks, and private paychecks will then not buy very much food or anything else that we consume. Your life savings might only sustain you for a couple of weeks.

]]>