The congressman is concerned that the U.S. economy could collapse due to the massive amount of government spening that is happening and the Fed continues to print money at an alarming rate driving the value of the dollar down. Combine this article with other information that has come to light over the last week and we begin to see what is possibly a very grim scenario.
The nearly failed debt auction: The Fed just had and auction and and instead of China, Japan, and other traditonally big buyers or our debt buying, our own banks bought most of it. More distubing a huge chunk went to undisclosed buyers that are probably just a cover for own goverment buying back our own debt.
The problem is the banks are using Taxpayer dollars to buy this debt in the first place, using funds we gave them in the TARP. This is money we printed out of thin air in the first place. Esintially we are printing more money to buy our own debt back . Its like paying one credit card with another on a larger scale than anyone can imagine.
When China stops buying our debt the whole house of cards will come tumbling down. Added to this China has her own financel problems if they start selling off us debt at pennies on the dollar our whole economy will come crashing down.
As of this moment there is not way to stop this crisis from happening at some point there are too many balls in the air its only a question of when now not if.
On Wednesday, February 10 2010, the US Treasury issued $16 billion in 30-year Treasuries. Here are the buyer data points:
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