Chapter 82 3. The debts of the United States and the IOUs of the Asian people

The unprecedented scale of treasury bonds issued by the United States in the 1980s, due to their high interest rates, greatly attracted private and non-bank institutional investors, and foreign central banks also flocked to them. In the process of returning and reusing existing dollars, the new dollar Create less.In the 1990s, due to the collapse of the world's major competing currencies, U.S. dollar treasury bonds were still in demand, and the price of imported daily commodities became extremely cheap when the currencies of third world countries generally depreciated. The United States experienced a golden age of high growth and low inflation. .Since 2001, due to the huge expenditure of the anti-terrorist war and the expiration of a large number of national debts of various maturities issued since the 1980s, as well as the increasing interest payments, the United States has been forced to issue more national debts to replace the old national debts.From 1913 to 2001, the United States accumulated a total of 6 trillion U.S. dollars in national debt in 87 years, and from 2001 to 2006, just over five years During this period of time, the U.S. has increased its national debt by nearly three trillion U.S. dollars, and the total U.S. federal national debt has reached 8.6 trillion U.S. dollars, and the daily rate is 25.5 billion U.S. dollars.The rate of 500 million is increasing.The interest expense of the U.S. federal government has ranked third in government expenditure, second only to health care and national defense, reaching nearly 400 billion U.S. dollars each year, accounting for 17% of its total fiscal revenue.

From 1982 to 1992, the issuance of money in the United States was still in a state of moderate growth, with an average annual increase of 8%.But from 1992 to 2002, the U.S. currency issuance entered the fast track, reaching 12%.Beginning in 2002, the war on terror and the need to stimulate an economy on the brink of recession have led to a staggering 15 percent increase in money creation in the U.S. at a time when postwar interest rates are near rock bottom.In fact, judging from the steepness of the issuance of U.S. treasury bonds, everything is inevitable.It was no accident that the Fed announced in March 2006 that it would stop reporting M3 broad money statistics.

Since September 11, 2001, in order to save the stock market and the bond market, Greenspan quickly lowered the interest rate from 6% to 1% regardless of the consequences. People finally understood that the U.S. dollar was actually a piece of paper with green patterns printed on it.Major US dollar holders all over the world pounced on real estate, oil, gold, silver, commodities and other things that the Fed could not change at almost the same time.A French investor said: New Yorkers can issue dollar bills, but only God can issue oil and gold.As a result, the price of crude oil rose from 22 dollars a barrel to 60 dollars, and the prices of gold, silver, platinum, nickel, copper, zinc, lead, soybeans, sugar, coffee, cocoa, etc. were all 2002 prices. One hundred and twenty percent to three hundred percent.But economists still swear that inflation is only 1︱2%, people can't help but think of Mark.A famous quote from Twain: There are three kinds of lies in this world: lies, damned lies, and statistics.

Even more disturbing is the fact that the total debt of the United States has reached 44 trillion US dollars, which includes the sum of federal debt, state and local government debt, international debt and private debt.These debts spread out to nearly $150,000 for each American, and a family of four has to bear nearly $600,000 in debt.Among private debts, the most notable are the huge amounts of home mortgage loans and credit card arrears.If calculated at a conservative interest rate of 5%, $44 trillion needs to pay as much as 2.5% per year.The interest of 2 trillion US dollars is almost equivalent to the total fiscal revenue of the US federal government for the whole year.Nearly 70% of all debts were created after 1990.It is no longer possible for the United States to launch the high interest rate war in the early 1980s to hold third world countries, because the United States itself is already heavily indebted, and any policy of high interest rates is tantamount to economic suicide.

Debt monetization, combined with the super-amplifier of fractional reserves, has severely overdrawn the future wealth of the American people.By 2006, the total amount of personal income tax paid by Americans will be transferred to the banking system to pay the interest on debts after only a short stay with the federal government.None of the income tax paid by individuals goes to the government. The education expenditure in each region mainly depends on the local property tax revenue. The construction and maintenance of highways in the United States are paid by gasoline tax. The cost of war for foreign troops is exactly equal to that paid by American companies corporate tax.In other words, 300 million Americans have been indirectly taxed by bankers for decades and continue to be exploited year after year.The savings of the American people are scraped off by the bankers' potential taxation through long-term inflation.

Regardless of whether the debtors in the United States can still pay off the debt with interest rate, the problem is that the U.S. government has no intention of repaying the national debt at all.The U.S. government just keeps replacing old bonds and the interest accrued on them with ever-increasing new bonds, and the cycle repeats forever.On the other hand, as the Federal Reserve Bank of Philadelphia points out, a growing number of analysts now view Treasuries as useful, even (economic) boon.They don't think the national debt needs to be reduced at all. Yeah, if a person could live a life of luxury by constantly taking on more and more debt and never having to pay it back, there would be nothing like it in the world.This kind of good thing that sounds like an economic perpetual motion machine is now popular in the United States.These economists believe that the idea that you can use increasing debt to enjoy a good life forever is not fundamentally different from the idea that a country can get rich by printing more money.

These scholars further accused Asia and other countries of excessive savings as the root cause of the structural imbalance of the world economy. This kind of argument that they got cheap and sold themselves is enough to prove how shockingly their academic morality has degenerated.Excessive savings in Asian countries?Where do they have excess savings?These decades of hard-earned savings are being sucked into the great experiment of the unprecedented economic perpetual motion machine in human history through the purchase of U.S. treasury bonds. The export-oriented economies of Asian countries demand US treasury bonds, just like drug addiction.And the United States is also happy to use this kind of national debt that will never be repaid in essence to give the Asian people IOUs.However, Asian countries will eventually realize that it is not a worthwhile investment to take the real risk of irreparable and sharp depreciation of US dollar assets for the nominal return of only 5% of US treasury bonds.

Former U.S. Secretary of the Treasury Larry Summers pointed out that if China stopped buying treasury bonds worth billions of dollars per week, the U.S. economy would be in big trouble, but the Chinese economy would also be in big trouble due to shrinking exports to the U.S. In fact, both sides Already caught in a state of financial terror equilibrium.