US is at the mercy of China, and our current economic/financial system

This video just about sums it up. The US, being the largest debtor nation in the history of mankind, has no hope of financing its activities once the world stops buying up its treasury bonds, or in other words, stop lending money to them. The US owes $800 billion to China, and China being US' largest creditor can stop lending to the US any time. In fact, its US reserves holding have been flat since March 2009. There are so many people (on youtube for eg.) who still try to argue that China has no choice but to keep on buying US debts, because otherwise the USD will fall and China will lose all its money since it is holding on to so much USD. Well, if I were China, I will rather exit now, salvage whatever value I have left in the USD now, rather than keep on buying the USD and eventually let it fall to zero. It is really choosing between the 2 evils, and I believe China is smart enough to choose wisely. They have been making  a lot of noise about the USD recently, and are diversifying into gold.

It is unbecoming that the great empire of US has to get FED to buy its own treasury bonds. The govt issues debt and the govt buys up its own debt?? Anyway, it's not like the FED has the money to start with. The FED can only buy the bonds by printing more money out of thin air. In any case, the US is essentially funding its cash shortfall by printing money and therefore further eroding the value of the dollar. To attract foreign buyers of its debt, the US has to raise interest rates a lot. But in doing so, its short-term interest payments to creditors will also balloon. Talk about being in a quagmire.

The US is just like any other empire in the ebb of time. Great empires rise and fall. They achieve awe-inspiring technological, economic, social and military advances. And then they start to weaken. That has been the case for all the great empires of the past that I've studied. The great Roman, Maya, Aztec, Mongol, Ottoman, Byzantine, Greek, Persian, Chinese empires are just a few example. The 18th century belongs to France, 19th century belongs to Spain, 20th century belongs to the US, and now the 21st century will belong to China.

So put into the perspective of history, I don't find the US really that special. The fact is that they've way over-extended themselves for several decades, and the time of reckoning is very very near. Please note that I have nothing against the US people. I care for the people of the US, but I feel that the politicians have really let them down.

The US' great experiment with socialism and Keynesian theories have failed.

You can't just steal wealth away from parts of the population and give benefits to the other parts of the population (eg. education, health, farming subsidies). Why would 300 million people pay money to subsidize  a few farmers?? Like Jim Rogers love to say, the US will be better off if those 300 million people guarantee the farmers a life-time of salary, a car, and a house, and in return, the farmers quit farming. Allow foreign crop produces to compete. The Americans will have lower prices and a much better life.

You can't just steal wealth away from the population and give them to the bankers, those people who don't produce real tangible goods. The stimulus package is just to save the jobs of a few people in Wall Street, that's all. Talks about saving jobs with the stimulus package is ludicrous. Obama said that without the package, unemployment will rise above 8%. Now it's 10%, and he's left scratching his head as to what went wrong.

You can't just keep on throwing money into the unproductive parts of the economy. For decades, people have been going to college, getting degrees that will get them into Wall Street. That is an unproductive sector of the economy, which produces no tangible goods. There's a real shortage in the productive parts of the economy, and one which stands out is agriculture. Producing and saving gets a nation out of trouble, not consumption and bad debt. Note that I used the word bad debt. Because that's what the US has in huge unpayable quantities. It borrows, and squanders all those money away. So little money went into improving its productive capacity. All those money went into unproductive sectors (eg. education, healthcare) and senseless projects designed to stimulate public consumption (eg. cash-for-clunkers, housing rebates), and of course, money went to the foreigners as well. The FED gave away money to foreign banks, foreign companies which are counter-parties to the US institutions in derivatives trading. The ultra-secretive FED won't even reveal to whom those money went to. It's public money, and they have the rights to know!

That's essentially what the US has been doing. No wonder there's no growth, no wonder there's high unemployment. Money is invested so wrongly.

Seriously, if people really understand the financial and banking system of the world, they'll see how unfair it is, and how morally wrong it is. Bankers can just create money out of thin air, they can inflate money at will, they can charge interest on those bogus money, and the most evil effect of all these is that they erode the public's wealth. They steal the public's wealth not by making you buy from or pay to them, but just simply by the act of creating money out of thin air. The full explanations can be found in my first 3 posts in this blog I believe. It doesn't take a rocket scientist to figure all these out.

Henry Ford, the founder of the Ford Motor Company, have a quote which I like:

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

Well, the reason why I focus so much on the US is because their downfall will really rock the world. There'll be a period of hardship.

Our current system is unsustainable. This system requires that we have a consumerism culture, that we have perpetual and increasing debt in the world, that the public's wealth be eroded over time, and that the earth's resources are used up at an exponential rate. In the end, all the earth's resources will be used up. There'll be no where to run to, and the system will finally implode on itself, if it hasn't already earlier. There needs to be a real fundamental change, which I can't see occuring in my life time. Perhaps a hundred years from now, things may be different.