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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

U.S. Debt Reality Check

Interest-Rates / US Debt Nov 16, 2011 - 04:33 PM GMT

By: Rob_Kirby


Best Financial Markets Analysis ArticleTic, Tac, Toe, Three Clowns in a Row


Treasury International Capital [TIC] data was released Wednesday morning [Nov. 16, 2011] by the U.S. Treasury.

Appended from: U.S. Treasury TIC data

Appended below is a summation of the U.S. Treasury’s take on what happened in Sept., 2011 reporting:

Volatility in international financial markets made for a second straight month of increasing inflow into long-term US securities, at $68.6 billion in September following August's revised $58.0 billion. These follow inflows of only $9.1 billion and $4.1 billion in the two prior months.

….increasing demand for US securities is narrowly based into Treasuries in contrast to outflows for corporate bonds and especially US equities which is no surprise given the general move into safety and away from risk. Net outflows from equities were a very steep $19.2 billion in September following August's $6.5 billion outflow.

When including short-term securities the story is the same with net inflows at $57.4 billion in September vs an $89.3 billion inflow in August that follows significant outflows in the relatively quiet months of July and June. Country data on US Treasury holdings shows increases for the three major holders -- China, Japan, UK.

Here’s what’s really going on:

Reality Check

  • China and Hong Kong are demonstrably no longer willing to add U.S. debt – in fact, taken together – they have decreased their aggregate U.S. holdings by 40 billion over the past 9 months.  It is more than apparent they are “full on the name” U.S.A.
  • Japan [who no longer wants to add to their U.S. debt heap] is being forced – due to mercantilist self-interest – to purchase U.S. debt to keep the Yen from appreciating too much versus the Dollar, completely choking-off their export led economy.  The reality is that Japan MUST repatriate [sell] MANY U.S. Dollars – to raise Yen balances – to rebuild their tsunami ravaged economy.  Speculators understood this too and tried to “front run” officialdom [like Goldman Sachs and J.P. Morgan do so often with impunity] and officialdom “turned the tables” on the speculators.
  • Bankrupt Britain is carrying much of the Fed’s water – strapping on approximately 100 billion worth of toxic U.S. Treasuries [that no one else in the world besides the Fed would purchase] in the past 6 months.  This is done so the Fed/U.S. Treasury can say “foreigners” are actually buying U.S. debt.  The truth of the matter is – although never publicly stated - that the Fed is “owned” or controlled by the same narcissist, sycophant miscreants who “own” the Bank of England.

Ladies and gentlemen, the financial challenges facing America are MASSIVE and no more “solvable” than the issues currently facing Greece, Italy and Europe at large.

This is reality.

What is criminal is how the derelict mainstream financial press “spins” – aides and abets - and otherwise obfuscates this reality.

The precarious state of America’s finances are not reflected or reported accurately.  Officialdom has shown a great and well documented proclivity to lie, obfuscate and rig all facets of our capital markets and data reporting to perpetuate the ruse.

The mainstream press – the fourth estate - has vacated its fiduciary duty and traditional role in a free society.  Historically, the mainstream press actually investigated, verified and reported the news – making deceptions like the one outlined above impossible.

This duty has now been largely, if not exclusively, left to the alternative press – on the Internet. 

  • This is why cottage industries like John Williams’ have sprung up like daisies in a meadow [showing that inflation measured today – if done by the same metric as 1980 – would be accurately reported over 12%]
  • This is also why organizations like the Gold Anti-Trust Action Committee [GATA] and books penned by a list of international authors/researchers like Dimitri Speck have come to be – all documenting the suppression of the price of gold, the historic and natural alternative [enemy] to the failing, fiat U.S. Dollar.

In case you haven’t noticed, this is also why the dinosaur media is losing their viewership, readerships and their advertising dollars.

This is why the politicos and powers-that-be are so consumed with “clamping down” on the internet in particular and more generally – first amendment rights in the U.S.  They know what they’ve done and they realize that Jane and Joe Sixpack are becoming aware of what they’ve done.

People are Waking Up

It is this awakening – of the criminal acts committed in the name of perpetuating U.S. Dollar hegemony – this UTTER CONTEMPT - that has “seeded” the grass roots movements like the TEA [taxed-enough-already] Party and OWS [occupy-Wall-Street].  This awakening has only begun and it embodies a bullet-proof idea whose time has come.

By Rob Kirby

Rob Kirby is proprietor of and sales agent for Bullion Custodial Services.  Subscribers to the Kirbyanalytics newsletter can look forward to a weekend publication analyzing many recent global geo-political events and more.  Subscribe to Kirbyanalytics news letter here.  Buy physical gold, silver or platinum bullion here.

Copyright © 2011 Rob Kirby - All rights reserved.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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