Media Ignores Financial Debt Crisis Coming


The U.S. financial media continues to ignore how foreigners are dumping their U.S. Treasuries at a record pace – at a time when the Federal Reserve is no longer adding to its U.S. Treasury holdings! During the 5-year period of June 2009 through June 2014, outstanding U.S. government debt increased by $5.65 trillion of which $2.6 trillion was financed by foreigners and $1.74 trillion was monetized by the Federal Reserve. Our foreign creditors plus the Fed purchased a combined $4.34 trillion or 77% of the net increase in U.S. Treasuries outstanding.

Since June 2014, outstanding U.S. government debt has increased by $1.04 trillion of which $27.6 billion was financed by foreigners and $64.66 billion was monetized by the Federal Reserve. Our foreign creditors plus the Fed only purchased a combined $92.27 billion or 8.89% of the net increase in U.S. Treasuries outstanding.

We just went from the Fed+Foreigners financing 77% of our deficit spending to less than 9%!

 
U.S. Treasuries Held by Foreigners have now officially declined on a trailing 12 month basis for the first time in 15 years. However, back in 1998-2001 the U.S. had a budget surplus – so a decline in foreign held debt was expected. The last time that foreign held debt declined year-over-year during a period of U.S. budget deficits was in 1979, right before gold exploded for a gain of 179% over the following 12 months – its largest short-term rally in history! Our current budget deficit is equal to -2.5% of GDP compared to our 1979 budget deficit equal to only -1.03% of GDP.
 
If foreigners continue dumping their U.S. Treasuries, we could see a debt crisis in 2016/2017 that is far worse than 1979/1980 where gold soars again by 179% or more! See for yourself, check out these shocking NIA charts: http://inflation.us/media-ignoring-americas-unfolding-debt-crisis/
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