by Jeff Berwick, The Dollar Vigilante:
He’s made all kinds of promises about major changes he intends to make with the US federal government. But, could the US government be on the verge of complete bankruptcy?
This is a chart of foreign central bank purchases and sales of US Treasury debt.
As can be seen, since the start of the millennium, foreign central banks have been sopping up the massive amount of debt being created by the US government… until 2015.
Starting in 2015 foreign central banks became net sellers and the amount of selling has done nothing but increase since.
The wholesale liquidation of US Treasuries continued in November, when according to the just released TIC data, foreign central banks sold another $936 million in US paper in November 2016.
All foreign holders of US Treasurys combined sold $70.8 billion in November, the most in one month ever, bringing their total holdings to $3.771 trillion, far below the $4.117 trillion held one year ago. On an annual basis, the drop was -8.4%, the biggest decline on record.
If this continues, and it doesn’t appear to be slowing down presently, it will mean that the Federal Reserve will have to print more money (quantitative easing) to buy up the debt or the US federal government will have to default on the debt.
If the Federal Reserve prints trillions more, it will hasten hyperinflation which will result in the destruction of the US dollar and the US economy.
If the Federal Reserve doesn’t print trillions, then the US federal government would have to default on the debt which would cause the biggest financial crisis in the history of the world.
Those are the options.
Could Trump have been set-up as the fall guy for the bankruptcy of the US? We’ll find out soon.
Trump predicted before the election that the central banks would set off a financial collapse after he won. And we’ve already seen gold, silver and bitcoin begin to soar as inauguration day nears.
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