Simple's Green Room

[pennies2007]

I wanted to post this for folks who look for "chinks in the armor", so to speak. If you do enough research and start digging deeply enough, it's easy to see how artificially inflated our own US stock market really is, not just now but for many, many years. And it's all based on huge amounts of debt.

Eventually of course, all of that comes back full circle and bites you in the rear end as many nations, including ours, have found out in the past. Unfortunately, massive debt multiplied by decades of monetary easing = depression.

This one article and others I have found like it show that many countries are dumping their holdings of US debt and are loathe to acquire more at this point. The reason is simple...they have debt problems of their own and they are finally turning inward to address the issue and take care of themselves because they are now forced to do so. Those countries, like the US, have grown comfortable with a bloated, debt-ridden lifestyle that has been decades in the making and are now finally having to pay the piper.

When China and other major US debt purchasers no longer want US debt at low interest rates, the interest rates guaranteeing the debt purchases have to go up to entice buyers, just like going to the bank with poor credit and having to pay a much higher interest rate on any personal loan for an individual.

This is the Fed's worst nightmare. Of course, they will try to fight such events with more liquidation by buying their own debt back, which is foolishness of course. That, too, is a death cycle.

Ultimately, such events will crush not only the US economy but the world economy and we will see, in our lifetimes (and probably much sooner than we expect), the next Great Worldwide Depression.

Cracks in the armor...

http://www.bloomberg.com/news/articles/2015-08-09/china-slashes-u-s-debt-stake-by-180-billion-and-bonds-shrug