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The US is Borrowing Itself Money

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posted on Mar, 19 2008 @ 04:45 AM
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The following source is from a floor Statement by Senator Kent Conrad (D-ND) from 2005

Well, increasingly we are going into debt with other countries around the world. We owe Japan over $680 billion. We owe China over $240 billion. We owe the United Kingdom over $140 billion. My favorite is the Caribbean banking centers.

We owe the Caribbean banking centers over $100 billion. I like to ask audiences back home if anyone is doing business with the Caribbean banking centers. I have never had a hand go up. I do not know where the Caribbean banking centers get their money, but we owe them $108 billion


Source

That's a very good question that I have been trying to find an answer to a couple of years ago.

The US has a huge deficit that enables Americans according to Western standards, the government to spend billions on wars and policing the world.

But who carries this financial burden?

The US government sells treasury securities in the form of e.g. treasury bonds. These investors loan money to the US government in exchange for a certain return on investment.

Without these investors, the US would go bankrupt. The debts are so extreme that the US economy would collapse without foreign financing.

The biggest loaner is China, which owns US T-bonds with a value of over 1 trillion Dollars. It is self-evident that a constant depreciation of the US Dollar results in a lower return on investment, not to talk of the consequence a collapse of the Dollar would have.

The following table shows the six foreign major treasury securities holders:



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When I reviewed this table yesterday I saw one remarkable change: Brazil. For some reason they are suddenly buying US treasuries like crazy. But later more on that.

As you can see, the US government owes more than 100 billions of US dollars to Caribbean Banking centers. The question is who owns these Caribbean banking centers and where do they get their money from.

I found the answer in Tom Naylor's book 'Hot Money'. In 1965, a prominent bank (Chase Manhattan) was asked by the Pentagon to create a system of offshore banking centers, in order to attract criminal captical into the Dollar, to help finance the Vietnam War. US banks wanted to make themselves the New Switzerland, and the US government agreed not to withhold income-tax on foreign criminal holdings of treasury bills, in order to attract money to support the Dollar.

These banking centers still exist today and are located on e.g. the Bahamas, Bermuda, Cayman Islands, Netherlands Antilles and Panama.

Now the question of who exactly owns these banking centers is answered, there is one question left. Where do they get their money from?

Partly from criminals such as drug and war lords, but there is a suspicion that the US loans itself money. How could they do this?

In March 2006 the Fed decided to cease e publishing M3 Money Supply data, which contains of the entire quantity of bills, coins, loans, credit and other liquid instruments in the US economy.

The reason being that the cost to collect M3 data outweighed the benefits.

M1 Money Supply Data measures the most liquid forms of money: (the amount of currency actually in the hand of the public such as traveler checks and demand deposits.

M2 measures all the data of M1, plus savings accounts, time deposits of under $100,000, and balances in retail money market mutual funds.

Apart from the data from M1+M2, M3 measures the big amounts such as
''large-denomination ($100,000 or more) time deposits, balances in institutional money funds, repurchase liabilities issued by depository institutions, and Eurodollars held by U.S. residents at foreign branches of U.S. banks and at all banks in the United Kingdom and Canada."

In other words, M3 keeps track of the big money. The fact that M3 money supply data won't be published anymore means that the government can ''print'' extra money and put this into the system without any average Joe having a clue about it. If people would, (hyper)inflation would occur. Basically, the government is creating money from air.

This money is put into the system through the Caribbean banking centers, which then buy t-bonds in exchange for Dollar loans and thus, the US government is financing itself without damaging the value of the Dollar.

I'll get back to Brazil later as it seems that the China has made some deal with them to buy their US treasury bonds in order to weaken then US military, but more about that later.


[edit on 19-3-2008 by Mdv2]




posted on Mar, 19 2008 @ 02:06 PM
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I havent been able to find out exactly how this agreement between Brazil and China has been set up exactly. Will try to continue after having done some more research.



posted on Jan, 3 2009 @ 04:29 AM
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Caribbean banking centers:

Oct 2008 (no data for November, December available?)



And Jan 2008




One of the most unknown stories today.





[edit on 3-1-2009 by Mdv2]



posted on Jan, 3 2009 @ 09:09 AM
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I think you should look closer at the increase in bond holdings by the UK. From 67B in July 07 to 360B in October 08. As I understand it, the UK has massive debt like the US and shouldn't have the ability to be purchasing US bonds. Of the entire list of foreign bond holders, only China, Japan and the Oil Producers have account surpluses that would allow them to purchase our debt.

These tables also leave about 8 Trillion dollars in national debt unaccounted for - are we supposed to believe that "domestic investors" have purchased $26,000.00 in treasury bonds for every man, woman and child living in the United States...?

This whole thing is a giant Ponzi scheme and when it collapses (and it will), we are going to see a global revolution like no other. Nobody who even 'appears' to be wealthy will survive the backlash. Good thing I'm dirt poor.



posted on Jan, 3 2009 @ 01:26 PM
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Originally posted by mythatsabigprobe
I think you should look closer at the increase in bond holdings by the UK. From 67B in July 07 to 360B in October 08. As I understand it, the UK has massive debt like the US and shouldn't have the ability to be purchasing US bonds.


Can you believe it? An increase of 200 BILLION in 10 months time? I've tried to find additional information on it but it seems there is little info available. On the other hand, what's 200 billion these days? They are blowing up the system like they are doing in Zimbabwe for some time now. The US doesn't remember the Weimar Republic, obviously.

[edit on 3-1-2009 by Mdv2]



posted on Jan, 3 2009 @ 02:25 PM
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Originally posted by Mdv2

I'll get back to Brazil later as it seems that the China has made some deal with them to buy their US treasury bonds in order to weaken then US military, but more about that later.


From your charts there is no indication that Brazil is buying China's U.S. treasury bonds. If I am looking at them correctly, it isn't tracking the amount traded in between investor-investor, it is tracking how much they are buying from the U.S. treasury. China has been pretty constant in treasury purchases as well as Brazil over the past year (2007-2008)/



posted on Jan, 3 2009 @ 06:36 PM
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Originally posted by Mdv2
. The US doesn't remember the Weimar Republic, obviously.



Correction, The US has completely forgotten about the Continental. That is, we have been through this once before. This is why the constitution defines the dollar in terms of a specific amount of silver.



posted on Feb, 23 2009 @ 08:56 PM
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Actually the Caribbean is home to over a trillion in hedge funds who buy treasuries.



posted on Feb, 23 2009 @ 09:10 PM
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This thread is beyond interesting.
I bet we have stationed banks all over the globe and our doing this at our own will..perhaps a Ponzi Scheme?
Or maybe one of the smartest moves in the history of the world....if you were trying to control a certain population.
I would love to know on where your research goes...especially considering the immense influx of US Bonds in a country like the UK when they are going into debt as well?....



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