ForeignersAreDumpingU.S.

DebtAtARecordPaceAndOur$20Trillion
NationalDebtIsPoisedToBecomeAMajorCrisis
ByMichaelSnyder,onJanuary22nd,2017

WhilemostofthecountryhasbeenfocusedontheinaugurationofDonaldTrump,averyrealcrisishasbeenbrewingbehindthescenes.ForeignersaredumpingU.S.
debtatafasterratethanwehaveeverseenbefore,andU.S.Treasuryyieldshavebeenrising.Thisispotentiallyamassiveproblem,becauseourentiredebtfueled
standardoflivingisdependentonforeignerslendingusgiganticmountainsofmoneyatultralowinterestrates.IftheaveragerateofinterestonU.S.governmentdebtjust
gotbackto5percent,whichwouldstillbebelowthelongtermaverage,wewouldbepayingoutaboutatrilliondollarsayearjustininterestonthenationaldebt.If
foreignerskeepdumpingourdebtandifTreasuryyieldskeepclimbing,amajorfinancialimplosionofhistoricproportionsisabsolutelyguaranteedwithinthenextfour
years.
OneofthemostsignificantaspectsoftheObamalegacyistheappallingmountainofdebtthathehasleftbehind.AsIwritethisarticle,theU.S.nationaldebtis
sittingat19.944trilliondollars.DuringObamaseightyears,astaggering9.3trilliondollarswasaddedtothenationaldebt.Whenyoubreakthatnumberdown,itcomesto
morethanahundredmilliondollarseverysinglehourofeverysingledaywhileObamawaslivingintheWhiteHouse.Injusttwoterms,Obamaaddedalmostasmuchto
thenationaldebtasalloftheotherpresidentsbeforehimcombined.
WhatObamaandthemembersofCongressthatcooperatedwithhimhavedonetofuturegenerationsofAmericansisbeyondcriminal.
Unfortunately,hardlyanyoneistalkingaboutthisrightnow,buttheconsequencesareabouttostartcatchingupwithusinamajorway.
Theonlypossiblewaythatourgameofborrow,spendandstickfuturegenerationswiththebillcancontinueisiftherestoftheworldparticipates.Inotherwords,we
needthemtocontinuetobuyourdebt.

Unfortunatelyforus,amajorshiftisnowtakingplace.AccordingtoZeroHedge,themostrecentnumbersthatwehaveshowforeignersdumpingmorethan400million
dollarsofU.S.debtoverthepast12months

ThewholesaleliquidationofUSTreasuriescontinuedinNovember,whenaccordingtothejustreleasedTICdata,foreigncentralbankssoldanother
$936millioninUSpaperinNovember2016,whichduetoanoffsetof$892millioninbuyingoneyearago,meansthatforthe12monthperiodended
November,foreigncentralbankshavenowsoldanewalltimehighof$405millioninthepast12months,upfromarecord$403millioninLTMsalesas
ofonemonthago.

Thisisntacatastrophicemergencyjustyet,butifwecontinuedownthisroadwewilleventuallygetthere.TheonlywaythattheU.S.governmentcancontinueonwith
businessasusualisifitcancontinuetoborrowbillionsuponbillionsofdollarsatultralowinterestrates.NowthatTreasuryyieldsarerising,somepeopleare
beginningtogetquitenervous

Aswepointedoutonemonthago,whathasbecomeincreasinglyobviousisthatbothforeigncentralbanks,sovereignwealthfunds,reservemanagers,
andvirtuallyeveryotherofficialinstitutioninpossessionofUSpaper,isliquidatingtheirholdingsatadisturbingpace,somethingwhichinlightofthe
recentsurgeinyieldstoover2yearhighs,appearstohavebeenaprudentmove.
Insomecases,likeChina,thisistooffsetdevaluationpressureinotherssuchasSaudiArabiaandotherpetroleumexportingnations,itistoprovide
thefundsneededtooffsetthedropinthepetrodollar,andtobackstopthecountryssoaringbudgetdeficit.Inallcases,itmaysuggestconcernsabout
aspikeinfuturedebtissuancebytheUS,especiallynowundertheprofiscalstimulusTrumpadministration.

SomedayhistoriansaregoingtolookbackinhorroratwhattookplaceduringtheObamayears.
Theamountthatwasaddedtothenationaldebtduringhisyearscomestoapproximately$75,129foreverypersonintheUnitedStateswhohadafulltimejobin
December.Thereisnopossiblejustificationforthis.Butbecausetherehaventbeenanycatastrophicconsequencessofar,mostpeopleassumethatthistheftfrom
futuregenerationsofAmericansmustbeokay.
Inapreviousarticle,Iexplainedthatgovernmentdebtgreatlystimulatestheeconomy.Ifwehadnotborrowedandspent9.3trilliondollarsoverthepasteightyears,we
wouldbeintheworsteconomicdepressioninU.S.historyrightnow.
Butmostpeopledontunderstandthis.Theydontgetthefactthatwearelivingway,wayaboveourmeans.AndtheyalsodontgetthefactthattheonlywaythatDonald
TrumpcankeepthepartygoingistoborrowandspendjustlikeObamawasdoing.
AndevenwithallofObamasrecklessness,hewasstilltheonlypresidentinallofU.S.historynottohaveasingleyearwhenU.S.GDPgrewbyatleastthreepercent.
ThefollowingcomesfromtheHill

DespitethetrillionsofdollarsingovernmentspendingpumpedintotheeconomyeveryyearunderObama,Americahasneveronceenjoyed
anannualGDPgrowthrateat3percentorhigher,makingObamatheleastsuccessfulpresidentatleastwhenitcomestoeconomicsin
modernhistory.

AhistoricallysluggishGDPisnttheonlyconcernworthmentioning.UnderObamastenure,averageannualfoodstampenrollmenthasrisenby
morethan15million(comparedto2008).Thehomeownershiprateisthelowestithasbeensince1995,theearliestyearprovidedintheU.S.Census
Bureausmostrecentreport.TheBureauofLaborStatisticsreportsmorethan590,000Americanssaytheyarenotinthelaborforcebecausetheyare
discouraged,afigurethats26percenthigherthaneventheworstannualaverageunderGeorgeW.Bush.Additionally,theemploymentpopulationratio
hasbeencontinuouslybelowthe60percentthresholdunderObamathelasttimeitwasthislowwas1985.

NowthatDonaldTrumpispresident,heisgoingtohavesomeveryhardchoicesinfrontofhim.
IfDonaldTrumpandtheRepublicansstopborrowingandspendingsomuchmoney,theeconomywillimmediatelystartsuffering.
ButiftheydocontinuedownthesamepaththatObamaputuson,itisarecipefornationalsuicide.
Soeitherwetakeourmedicinenow,orweriskcompletelydestroyingthebrightfuturethatourchildrenandgrandchildrenweresupposedtoenjoy.
WakeupAmerica,becausetimeisrunningout.

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January22nd,2017|Tags:AddingToTheNationalDebt,Borrow,Borrowing,Debt,DebtFueledStandardOfLiving,Debts,DumpingU.S.Debt,EconomicCollapse2017,Economic
Crisis2017,HowMuchAreWeAddingToTheNationalDebtPerYear?,InterestOnTheNationalDebt,InterestRates,NationalDebt,OurDebt,OurNationalDebt,TheU.S.National
Debt,TreasuryYields,U.S.Debt,U.S.NationalDebt|Category:GovernmentDebt

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