As the current administration continues to expand the US debt with multi billion dollar bailout after bailout, one asks the question: where does all that cash come from? Well in the past, when the US Goverment has to pay its bills and it’s checking account is a little low, money is raised via the sale of US Treasuries (currently around $3 trillion per year, a four or five increase over 2008 – just to keep the doors open!).
Foreign investors have been some of the biggest buyers of these borrowing instruments for years, but as you will see from this new article published by Casey Research today, the appetite of investors that provide this seemingly endless source of cash could be coming to an abrupt end soon, which would be disastrous for the US Dollar.
This could be one of the singlemost important articles we have run on this blog as it speaks to a sea change in the US economy, which could cause investments in hard assets like gold, silver and energy to skyrocket in value as the US dollar tips into a steep downward spiral.
Here is a quote from the article, with a link to the full article below:
“The latest report shows Russia and longtime monetary ally Japan edging towards the door. China and the oil exporting nations continue to convert an increasingly moderate amount of their trade surplus into Treasury Bills - but not on a nearly large enough scale to meet the inflated (and inflating) borrowing needs of the utterly bankrupt U.S. Government. And how long will they continue to show up when an increasing number of other foreign buyers start selling their Treasuries? No one likes to be the last one to leave a party, especially when the bananas flambe’ has tipped over and the curtains are on fire.”
Stong commentary indeed, but information that could help investors realign their portfolios accordingly as storm clouds gather on the horizon.
The full article is available here