SGM Metals: US Households Now Owe China $10K EACH for Financing "US Recovery"

People are starting to add up the tens of trillions in bailout freebies from banks to unemployment & wondering where it all came from? The cost of bankrolling the bailouts puts us in debt to China to the tune of $10K per household w/ no recovery yet?
China is wisely requesting tangible collateral for the trillions they put out
China is wisely requesting tangible collateral for the trillions they put out
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Nov. 5, 2012 - PRLog -- reports: [ The debt that the U.S. govt owes to foreign interests now equals approximately $47,495 for each household in the United States, according to the latest data released by the U.S. Treasury and the Census Bureau.

The portion of the U.S. govt’s foreign debt now owed to interests in Mainland China is about $10,090 per household.

At the end of August, the latest period reported by the U.S. Treasury, foreign interests held a total of $5,430,000,000,000 in U.S. govt debt. According to the Census Bureau’s latest estimate (which was for June 2012) there were 114,328,000 households in the US. Therefore, the total U.S. govt debt held by foreign interests was about $47,494.93 per household.

Back in January 2009, foreign interests held a total of $3,071,700,000,000 in U.S. government debt. That month, according to the Census Bureau, there were 111,079,000 households in the US. Therefore the total U.S. govt debt held by foreign interests was about $27,653.29 per household.

Since January 2009, the total U.S. govt debt held by foreign interests has climbed from approximately $27,653.29 per household to approximately $47,494.93 per household—an increase of about $19,841.64 per household.

Among foreign interests, those in Mainland China hold the largest share of the U.S. govt’s debt. The Mainland Chinese, according to the Treasury, owned $1,153,600,000,000 in U.S. Treasury securities as of the end of August.

Back in January 2009, interests in Mainland China held only $739.6 billion in U.S. govt debt. That month, the U.S. govt owed about $6,658 per American household to interests in China. As of the end of August, the U.S. govt owed about $10,090 per American household to interests in China—an increase since January 2009 of about $3,432 per household. ]

Has anyone noticed that the political machine has wisely made the call to extend the presidential election cycle by almost twice as much time it usually spans? I believe this was done in order to create a diversionary media circus as to distract the tax payers from focusing on the lack of recovery at home. In other words, if we didn’t magically have a 30 month (or better) re-election cycle this time around, instead of the traditional 12 months cycle, the people would realize how many homes were boarded up for foreclosure or how many of their neighbors were losing their jobs every month. These facts aren’t being focused upon because we have been instructed by the talking box to pick a candidate as far back as 2 1/2 years ago & to take to the streets trying to convince others why ‘our guy’ should be ‘their guy too’.

We now understand the inflation rate has been ‘massaged’ & the federal reserves convenient “under 2% inflation rate” is a bunch of bull, so we need to find a way to hedge the growing rate of inflation. The actual inflation rate according to John Williams of is officially right around 10% & if you have gone grocery shopping over the past year you would probably argue that its even higher than that. We also now know that unemployment rate has been conveniently “massaged” under 8% so that the sitting president could stand a viable chance of re-election since historically speaking there has never been an incumbent who was successful in accomplishing a 2nd term with an unemployment rate above 8%. This is done by not counting those who have given up the hunt for work & ‘assuming’ those who’s benefits expired must have found work since they stopped collecting benefits! Again, according to the real unemployment rate is above 22%! We also know that ‘the increase in real estate transactions’ the talking box has been touting in Arizona & Florida are NOT the result of home buyers getting approved to borrow money from the banks (since the banks have been ordered not to lend in order to keep the inflation rate in check & keep their inflation fairy tale plausible) & securing a new home because ‘they have faith in the recovery’ but instead investment groups turning to REITS (Real Estate Investment Trusts) in an attempt to find a return on their money since the govt. bonds that are traditionally used as safe revenue generating assets are offering negative returns on a 20 year loan to the govt.! These groups are buying up investment properties in hopes of generating that revenue stream that has been sabotaged by the FEDs ZERO PERECENT INTEREST RATE (ZIRP) scheme to protect the banks so they can shuffle money around & pad their balance sheets in hopes of appearing solvent moving forward.

So the three main economic indicators, unemployment, inflation & home sales/prices, have been proven to be fudged in an effort to create a plausible economic back story that would suggest we are in fact in that recovery the Obama administration swears started back in June of 2009, but what does this mean for the true nature of the economy? For starters, it means that we DO NOT HAVE A RECOVERY! It means that the re-election campaign made the decision that a rosier picture was needed or they stood no chance whatsoever or getting a victory this election cycle & they went whole hog to create that alternate reality. I believe who ever wins next Tuesday (Im also forecasting a “close race” that could very well require a ‘recount’ & we don’t need any ignition point) they will have to admit that things aren’t as hopey changey as they were told & that its now time for the tough conversations to begin. Somebody will have to fall on the sword for the misleading the public campaign & if Romney wins it will be the previous administration. On the other hand if Obama is successful in his re-election bid it will more than likely be ADP themselves who gets to wear the blame for this around their neck since they just committed career suicide by admitting they have basically doubled the employment numbers every single month in 2012 in that game of fabricating the recovery to match the story.

So if we don’t have a recovery, what do we have? A nasty recession that for all intents & purposes is technically now in depression territory. Based on this inconvenient truth it would be wise to begin to transition to a portfolio management strategy that adheres more to wealth preservation than profit seeking since the profit seeking markets have been distorted & manipulated as well but by High Frequency Trader who represent roughly 86% of daily market volume. The only thing that moves the markets nowadays is the FED injecting trillions of dollars in new funny money & fudged govt. economic indicators so putting your retirement dreams on the line with those two forces being your only source of hope seems a little too reckless in my opinion. We are now in a full blown currency war that has encouraged China to draft a trade agreement with 85% of the world & the main point is that never again will the US dollar be used as the reserve currency for trade amongst the participants. This will send a tidal wave of central bank reserves in the form of USD back to the US which will only help envelope the nation in useless dollars that will only serve to erode the purchasing power of the dollar & send commodity prices to the moon. It really has reached a boiling point in America & the rest of the world is preparing for what life will be like should the dollar be dethroned. Maybe you should consider that possibility yourself. Establish your “Weak Dollar insurance Policy” in physical gold & silver bullion & begin to participate in the sound money debate. Our recession is now morphing into that dreaded depression we have been warning of & rest assured the currency war will degrade into a worse trade war at the rate we are going currently. Inflation could very well accelerate into the hyperinflation zone if these returning central bank reserves begin to pile up on the nation. Play time is over. Remember that it is a far better strategy to PREPARE your portfolio than to attempt to REPAIR it once the damage has begun. Tick, tock.
Source:SGM Metals & The Elemental Economist
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