While we were going about our business, and maybe even soaking in some summer sunshine, the “US National Debt,” as the federal government’s explicit financial obligation is called, passed the $37 trillion mark.
As if to mark the occasion, the Chinese government unloaded a whopping eight billion, two hundred million dollars worth of U.S. Treasuries onto the market.
It’s a lot of money.
It’s a lot of debt.
And now China no longer holds it.
Thus they are not quite as invested in our future.
Is that scary?
Well, everything about our federal debt load should scare us. If we are placid and unperturbed now, how many extra billions and trillions would it take to shake us?
If you are especially concerned about world stability, it might make sense to comfort you with this … interesting … piece of information: China still holds over $750 billion in United States debt.
A more important piece of information might be what the Chinese central bank has been replacing the U.S. debt with: gold.
Lots of gold.
About 200,000 kilograms of gold!
Nicholas Nassim Taleb, author of The Black Swan, insists that “a single asset has overtaken the US dollar’s position as the world’s de facto reserve currency.” That asset is gold.
We aren’t on the gold standard, but it looks like we may be falling backwards into something like one.
It makes me wonder if there is still gold in Fort Knox … and just how much.
This is Common Sense. I’m Paul Jacob.
Illustration created with Krea and Firefly
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4 replies on “Billions and Billions”
Under international law, when one state displaces another, the new state acquires the debt of the old state. Were that not the case, then states would routinely effect their own formal replacement to get out from under debt.
The People’s Republic of China, in replacing the Republic of China, acquired the state debt of the Republic of China, and never bothered to service it, nor to renegotiate it; that debt has just been racking-up interest.
The share of that PRC debt held by the US comes to nearly a trillion dollars.
We should genuinely worry about the US debt; it represents both a financial and constitutional catastrophe. But the share held by the PRC is only a problem if our ruling class chooses not to exchange PRC obligations for US obligations.
At some point, the US regime will default on and/or repudiate its debt. Maybe openly, maybe through some form of easily detected subterfuge, but it’s coming.
Beijing seems to think that point is getting closer.
How many extra billions and trillions would it take to shake American globalists who presided over the weakening of the US economy and the American workforce, all to benefit China? All many of us can do is sit back and watch. No popcorn here. It’s not entertaining in the least.
I believe the national debt is way to high. I also believe some of this debt could be paid off by selling some of the land the government is holding. A lot of people went nuts saying they want to sell the beaches at Lake Tahoe and on and on. Having lived in Nevada for many years I know there is a lot of public land that really won’t bother anyone if it is sold. As long as the buyers meet certain requirements and citizens can object if they have a valid reason not wanting the sale. But will the antitrumpers listen and the MSM give it a fair shake.