First I'd like to lay out a few facts:
- The US current has a "official" debt of nearly 17,000,000,000,000.00. Source from Treasury Direct. I say official because it hasn't really changed since 5/31.
- China has been open about not wanting to use the US dollar as the currency for trade by making its own bilateral trade agreements that bypass the greenback.
- China has recently entered one of these agreements with Venezuela. I suspect that China's true end game is to bypass the US dollar for oil payments. The petrodollar has been a major force behind the foreign policy of the United States since leaving the gold standard.
- China is already a superpower that wants to replace the US as the world leader, and they have been economically destroying the US without having to fire one bullet.
- The Fed used to have some control over the US economy through rate increases and declines to cool or heat the economy. The housing collapse in 2008 destroyed a lot of the Fed's ability to control rates because of the mortgages in default. To revive the housing market, and the bank's balance sheet, cheap money had to be available for qualified buyers. This leaves the Fed with only one option, the printing of more money to buy its own bonds, since China is no longer interested in buying America's bonds. It's purely a pragmatic move on their part.
- The Fed cannot stop printing money. If interest rates rise, then people will once again start defaulting on personal debt, and that will be the real start of the world economy collapsing. Eventually, China's population will replace America as the economic driver for the world's economy, but I suspect that China's leaders want to make sure that the US is no longer a threat before that happens. Sun Tzu 101
- I also have a theory that immigration has largely been politically ignored to increase the demand for the housing market. and cheap labor.
- The QE∞ will cause inflation that will continue to cripple the middle and lower wage earners. Prices go up, and wages stay stagnant while lowering the quality of life for most everyone.
- Everyone remembers Cyprus and the "bail in"? Well, it has quietly expanded into Poland that plans on moving private pension funds into the control of the state for debt reduction. Government has never been a good steward of the citizen's money. Ever.
In part two, I'll lay out a strategy to combat the coming collapse. It will require discipline and frugality, but I'd rather do these things on my own terms than being forced into them. As preppers, the most probable SHTF scenario is going to be economic.
Comments are welcomed and encouraged. Keep Prepping - K