Let’s Face It – America Has No Money To Pay Its Debts

It is simple. America has no money left in its treasury to pay its bills. It needs to borrow more by raising its debt ceiling.

Debtors are the most important and you cannot default because from them, you can borrow more. Enough to last till the next president steps in and it becomes their problem.

Foreign debtors account for about 50% of US debt. China and Japan hold about $2.4 trillion which is about half of the 50% of an ever growing .


I do not know if Americans are aware of how fast their debt is growing because when Obama leaves his presidency, it becomes the public’s problem and debt is usually divided equally ?


US public debt and ceiling

The only country that is worse off is … Japan. Yet, they have deep pockets of reserves and they certainly do not have a debt ceiling publicity issue especially when they hire girl bands to sell bonds.


Boehner or Obama ? The Cave-Man ?

Obama CAVE-d on Syria and just 2 hours ago, CAVED on the Janet Yellen for the FED chair.

Now will he Cave on the Shutdown ?

Can we say Presidents are not what they were anymore ? They would appear to be the new age kings as Obama may print his own bonds or Obama trillion dollar coins, as Bloomberg puts it ! (only good till the next election ?)

I do not know what to make of it except it is so Hollywood these days.

IMF just downgraded their 2013 world trade forecast from 5.4% last year to 2.9% now. So what was the rally in the markets this year for ?

The stock market had rallied on expectations of better outlooks and then they revise it down but we decide we would keep the profits anyway and rally more when the outlook gets better because it is Hollywood and happy endings are to be expected.

So expectations are continuously suppressed and become lower and lower as Yellen comes into the picture and prints away the future of American kids. No wonder astute Asians are pouring in to US real estate because a banana currency warrants an asset bubble in the future.

Why Do I Still Hold USD ?

Because USD is 1/3 the sky, accounting for a third of the asset world of bonds and equities out there.

1/3 US
1/3 Japan and Europe
1/3 The Rest

And the king we must follow, even if he is a Cave man.