Jim Rogers: 'US the largest debtor nation in history'

Run time: 08:40 https://www.youtube.com/watch?v=iA1bUIrAtM4   Posted on YouTube: May 10, 2011 By YouTube Member: RTAmerica Views on YouTube: 305   Posted on DU: May 10, 2011 By DU Member: The Northerner Views on DU: 1095

 
While US and China are holding talks in Washington DC the question arises - who has the upper hand in this negotiation? Co-founder of the Quantum Fund Jim Rogers says he would always like to be a creditor, not a debtor.

I'd rather be a creditor too, but the U.S. has been smart in that they know China cannot get rid of their treasury bonds. China needs the US to buy it's crap. That's the only reason we're all still in a functioning society today. Why would they continue to fund us unless they had no other choice? Jeez the US is going down big time.

Slip, sliding away into the Bowels of Hell

As the standards of living and disposable incomes rise in the so-called 3rd world, this massive new consumer base of billions will easily strip away the importance of the US market (the US is only 4% of global population) for Chinese goods. China has been signing bi-lateral trade agreements wherein the exchanges will be settled in the 2 countries' own currencies, thus bypassing the US dollar. The only way the US treasury market is still functioning are through accounting parlour tricks such as the odious indirect monetization via the 'primary dealer' straw man scheme.

http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings
China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings


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I truly hope that all on here are deeply studying the models of IMF 'austerity' being forced down the sovereign nations of the EU collective throats. The only nation to successfully fight back so far is Iceland, and their model of resistance is the only way out. They are also the only nation so far that is actively arresting and prosecuting the banksters who are systemically creating this global oligarchic ponzi scheme.

Now, to what the USA should be taking copious notes on.

Again, the IMF and ECB imposed austerity programmes introduced in Greece, Ireland,(soon to be Portugal, Spain, and Italy, if they don't resist) as well as preemptively in many other EU nations, would make the Koch Brothers blush.

In some cases, you are talking about 30 to 50% reductions in broad governmental areas, such as education, medical, infrastructure, local police services, food safety, etc etc etc.

What prompted the protests in Wisconsin and other states, in terms of percentage cuts, and especially the cuts being debated at USA federal level, would make the 'PIIGS' nations thank their lucky stars they got off so easy.

For example, the Republicans in the house are talking about $50 billion a year in cuts. Even the slash and burn anti-statists such as Rand Paul talk about $500 billion year in cuts, and 90% of the USA thinks he is a madman.

Well, to equal, percentage wise, what Greece and Ireland are, at the end of the day,going to have carved out, at banker gunpoint, the USA is looking at cutting between $1 TRILLION, and $1.3 TRILLION a year.

If any of the EU resists, the banksters simply attack their sovereign bond markets, forcing yields up, and making it so expensive to borrow any money, they will collapse if they don't submit to the banker's yoke.

Here is a perfect example of this:

"Irish 10 Year Bonds Take Out Stops, Yield Surges Past 10% For First Time In History"

http://www.zerohedge.com/article/irish-10-year-bonds-take-out-stops-yield-surges-past-10-first-time-history
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THIS is what is coming to the USA, unless you smash the current central-bank run global monetary system, as you are the biggest debtor nation in the history of the world.

As soon as a viable alternative to the daily US treasury bond market emerges, (the only thing keeping the US dollar as reserve currency, as this market can handle at least $1 trillion dollars US a day in liquidity transactions), the banks will start a run on selling US treasuries, China, and Japan are already selling, and the yields will explode. The US Federal Reserve, which has already debased your dollar so much, will have to raise rates to such levels that the economy collapses (remember, between borrowing and debt service, you spend $1 to 2 trillion a year (try $2 or 3 trillion a year with a 9 or 11% basis point discount rate), just like the PIIGS, but played out on a grand, global, volatile chessboard of empiric proportions.

They fancy it up with new ways to rob folks, but at the end of the day it means the bank forecloses on the old widow woman! And someone gets very rich while someone else is left in the poorhouse.

Thanks for confirming my suspicions.

we've been duped.

"Some people that got stranded on an island, and I think it was 6 or 7 were Asians and there was one American and as soon as they were on the island they had to divide up the jobs. And one Asian was given the job of fishing, the other one was hunting, one of them got the job of gathering fire wood. So they all had jobs, and the American was assigned the job of eating. And so at the end of the day, they would all gather around and prepare this feast and the American would sit there and eat it. But he wouldn't eat it all, he´d just leave enough crumbs so he could give to the 6 Asians so they could go on and repeat it again tomorrow, spend all day preparing a meal for the American to eat. Now, the way modern economists would look at it, they would say "Well, this American is vital to the whole island economy. Without him nobody would have to fish, nobody would have to hunt, nobody would have to gather fire wood. He is creating all this employment on the island". But the reality is, every Asian on that island, his lot in life would be dramatically improved if they kicked the American off the island because now they would have a lot more to eat or maybe they wouldn't have to spend all day hunting and fishing and they can lay on the beach a little bit".
"The U.S. thinks it is the engine of economic growth in the world, when really it's the caboose. If the rest of the world lets the caboose go, the rest of the train will be able to move faster." - Peter Schiff


It was the (until recently) inexhaustible Chinese and Japanese hunger for U.S. Treasury debt (and our willingness to produce more of it than practically anything else they want) that created this situation.

Now we're at the point where the Fed is printing the money to buy the bonds. That's supposed to end in a few months. I wonder what will happen next.

...and we started his term as the largest creditor nation.