Who Actually Controls American Economy??

Nine politicians in China control the fate of the United States of America. I’m not kidding. The implications are scary. These nine men are the Standing Committee of the Communist Party of China. They control the value of China’s currency. Fortunately, it’s easy to forecast what a politician will do… He will do whatever it takes to keep his job.
In China, the goal of these nine politicians is to keep the Communist Party in power. The way to accomplish that goal is for the masses to stay employed. Right now, China keeps the people working by exporting cheap goods. In order to make sure those Chinese goods stay cheap, the Standing Committee sets the currency exchange rate artificially low. And that is the crucial part of the story…

How do these nine politicians keep the exchange rate low? They buy U.S. dollars. Importantly, these nine men don’t just sit on stacks of dollar bills… They invest those dollars in U.S. Treasury bonds.


It’s gotten out of hand. China owns nearly $1 trillion worth of U.S. debt. China’s holdings have increased dramatically every year… They’ve grown nearly tenfold since the end of 2000:

2000………………………………$99Bln
2001……………………………..$127Bln
2002……………………………..$166Bln
2003……………………………..$209Bln
2004……………………………..$267Bln
2005……………………………..$350Bln
2006……………………………..$451Bln
2007……………………………..$529Bln
2008……………………………..$804Bln
2009……………………………..$941Bln

China’s soon-to-be trillion dollars of U.S. government debt is not the end of the story. It’s just the beginning… in order for other Asian countries to compete with China, they have to artificially keep their own exchange rates low and that’s exactly what they’re doing. They’re doing it the same way China does… They’re buying mountains of U.S. Treasury bonds, too.
At this point, foreigners now own half of the U.S. Treasuries outstanding (of the ones that are not held by the U.S. government). And they’re buying more… Most importantly, there’s enough demand for U.S. debt from foreigners that the U.S. government can finance its deficits for years to come… all by simply selling Treasury bonds to foreigners.
Would you lend money to the U.S. government at 3.5% interest for 10 years? I sure wouldn’t. I really can’t name anyone who thinks 3.5% in government bonds is a good deal. The foreigners aren’t buying to earn 3.5% interest. They’re buying to keep the value of their currencies down.
India is an interesting example… Earlier this year, when India spent $6.7 billion buying gold from the IMF, it was all over the news. What WASN’T reported was that India bought far more U.S. Treasury bonds than gold. India has increased its stake in Treasuries by over $22 billion since last summer – increasing its Treasury bond holdings more than 200%.
So, yes, there’s a mountain of demand for U.S. dollars – Treasury bonds – from all over the developing world. The important thing is demand will last. It will last as long as the nine men on China’s Standing Committee don’t change their minds.
So what does all this mean?
It means the U.S. dollar will not crash right now.
Most investors believe the U.S. dollar is about to crash. But the facts are clear… The dollar has ready buyers of hundreds of billions of dollars worth of Treasuries. While the dollar might lose ground against gold, the reality is, no other paper currency has a tailwind of hundreds of billions of dollars of buying waiting in the wings like the U.S. dollar does.
Eventually, the “dollar bears” will be right. The U.S. will have to face all its debt one day.

Does New York Need Another “Carpet-bagger?”
The “politics of New York politics” defines mismanagement by most and criminal activity by some at all state and federal levels!! The seat of New York’s “Invisible Senator” Gillibrand is up for grabs in the November elections. Mr Harold Ford, Jr., is contemplating a run against the “Invisible Senator” for the obamacRATic nomination for her senate seat. Mr Ford grew up in Memphis, Tennessee and lived in Tennessee until a couple of years ago when he moved to New York to accept a vice-presidency and directorship at Bank of America Merrill Lynch. Mr Ford was the Representative in Tn’s 9th Congressional District from 1996 to 2004. He was then soundly defeated in 2006 during his run for a senate seat from Tennessee. Here are the recent occupants of that seat:
“Double-Dealin’ Dave” Paterson appointed the “Invisible Senator” to fill the “more-than-ample” seat vacated by Hillary Rob-em Clinton to become the less-than-stellar Secretary of State.
Ms Rob-em Clinton immigrated from Arkansas via the co-presidency to buy the senate seat vacated by the retiring Senator Moynihan.
Daniel Patrick Moynihan defeated then Senator James L. Buckley who returned to his homes in Sharon, Connecticut and Washington, D.C.
James L. Buckley immigrated to New York City to run as a carpet-bagger against-and defeating-Senator Charles Goddell, serving from 1971 to 1977. Mr Buckley was born in New York City, but lived most of his adult life in Connecticut. Senator Charles Goddell was born in, lived in, practiced law in Jamestown, N.Y. Mr Goddell was appointed by then Governor Rockefeller to the uncompleted term of the late Senator R.F. Kennedy.
Robert F. Kennedy immigrated from Massachusetts to run as a carpet-bagger against Senator Kenneth Keating of Lima, N.Y. Senator Kennedy and Hillary Rob-em Clinton are the best known “carpet-baggers” of the modern era. Senator Kennedy was murdered in office during his presidential campaign.
Must New Yorkers suffer with more “carpet-baggers” who only use the senate seat as a stepping stone to what they think are bigger and better things?? Already saddled with the self-serving “ruling class” at the city,county, state and federal levels, must we suffer a double anvil around our necks with another “carpet-bagger?”
Til Nex’Time….

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