Debt Is Building Everywhere

  Keep in mind that one man’s debt is another man’s asset. A least until the debtor can no longer make payments on his debt. When all the debtors became unable to make payments at once, then you have an economic collapse as everyone goes broke and becomes unable to pay their bills. Then there are widespread shortages as nothing gets produced until the producers get paid first, in cash.  

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It begins with a glut, which literally addicts the people and their governments to free resources, just like a drug. When the glut ends, the borrowing begins, and every government is like a junkie selling off everything in search of one more fix.

China is feeling the strain:

It’s no secret by now that China has a rather serious debt problem.

Although getting a precise read on it is next to impossible, all told the debt pile probably sums to something like $30 trillion. Various reports put the figure at between 250% and 300% of GDP all-in and as we reported back in January, that may have swelled to more than 340% by the end of 2015…

Things have gotten so bad that in 2015, Chinese firms issued $1.2 trillion in new debt just so they could service their existing loans. In other words, China’s entire corporate sector is quickly becoming one giant ponzi scheme.

And it is not just China. Other nations have begun selling off US debt to make ends meet.

In a bid to raise cash, foreign central banks and government institutions sold $57.2 billion of U.S. Treasury debt and other notes in January, according to figures released on Tuesday. That is up from $48 billion in December and the highest monthly tally on record going back to 1978.

It’s part of a broader trend that gathered steam last year when central banks sold a record $225 billion of U.S. debt…

So what are foreign central bankers doing with these piles of cash? They’re mostly using the funds to stimulate their own economies as the global growth slowdown and crash in oil prices continue to take their toll.

For instance, China has been liquidating its holdings of foreign debt to pump money into its slowing economy, plummeting currency and extremely volatile stock market. China, the largest owner of U.S. debt, trimmed its Treasury holdings by $8.2 billion in January, the Treasury Department said. The actual decline was likely larger considering China reported selling $100 billion of foreign-exchange reserves in January.

So in one month, they sold roughly a quarter of all of last year’s sales, which were themselves historic.

Supposedly, they are selling our debt because it is the most valuable, because the dollar is strong, and everyone assumes we will collapse last. Still, it is indicative of us entering a period where everyone is out for themselves. As they flood the market with our debt, there would presumably be fewer buyers for what we sell, which means it becomes harder to flood our nation with free (or at least freely borrowed) resources.

This insanity can only be supported with more irrational exuberance. If Trump’s rise is a mark of increasingly K-selected psychologies among the people, it would seem irrational exuberance will become harder to come by as time goes on.

The K-shift continues apace.

http://www.anonymousconservative.com/blog/debt-is-building-everywhere/