All the time you hear people claiming that most of the debt of the United States is owned by the People's Republic of China. You hear about future
takeovers and economic collapses.
Originally I, like the rest of the uninitiated masses, thought this could be true.
Come to find out it is a pure myth.
As of September 2010, the United States of America had a total outstanding debt of around $13.5 trillion.
Of that $13.5 trillion, the People's Republic of China, as of July 2010, owns almost $850 billion.
Well that isn't even 10% of the debt.
All foreign holders, inluding Japan and China, combined equal around $4 trillion as of July 2010 or less than 33% of our total debt.
That leaves over $9 trillion in debt, but to who?
I learned that the majority of our national debt is owned by an American Institution, the central banking system of the United States of America,
better known as the Federal Reserve. As of June 2010, the system holds over $5 trillion of the national debt.
At this point I decided to look up the national debt of the People's Republic of China and behold they have debt,
$350 billion worth.
Check this out:
Chinese facing debt time bomb
Separate reports by Citigroup and Victor Shih of Northwestern University warn that the Chinese government may be forced to bail out banks that
made loans for government-backed projects under the huge stimulus programme put together at the height of the financial crisis in 2008...
Professor Shih and the author of the other report, Shen Minggao of Citigroup, have identified 2011 as the crunch point when the Chinese Government may
have to engineer a bailout.
Now what about Japan, our second largest holder of US debt? They have $9.7 trillion of debt, almost twice its Gross Domestic Product.
The same scenario continues on with the UK and practically every other foreign holder of US debt.
The vast majority of the debt is public debt. Much of this public debt is owned by central banks as is the case in the US, China, and Japan. There is
almost $60 trillion in debt worldwide among all of these institutions.
Here is where things kind of get interesting. The central banks themselves are linked by a global banking entity.
This "Bank for Central Banks" is known as the Bank for International Settlements.
The BIS reports to no government and is accountable to no one, even the UN.
From the BIS website:
The Bank for International Settlements (BIS) was established as an international financial institution, enjoying special
immunities, pursuant to the Hague Agreements of 20th January 1930.
The founder shareholding members were the central banks of Belgium, France, Germany, Italy,
Japan, the United Kingdom and the United States (the Federal Reserve did not take up its rights as
founder member until 1994). Within two years of its founding, nineteen other European central
banks had subscribed to the Bank's capital. The Bank opened its doors in Basle, Switzerland on
17th May 1930.
Its Board of Directors are the Governors of the central banks of the United States, the UK, France, Belgium, Germany, Italy, Brazil, Canada, China,
Japan, the Netherlands, Sweden, Switzerland, and the European Union's central bank the ECB. The Board is dominated by six "Ex Officio" members: The
US, UK, France, Belgium, Germany, and Italy. The other members are elected.
What is left out on the history from the website is its involvement with the Third Reich. A number of Nazi officials served on its Board of Directors,
including the Reich's finance minister, and it was even suspected of helping the Nazis during WW2. It should be noted that during the war, the BIS
purchased over 9,000 kilos of gold from the Reichsbank.
At the end of WW2, during the Bretton Woods Conference, due to BIS involvement with the Third Reich, it was decided that the BIS should be dissolved
and liquidated. President Franklin Roosevelt approved the liquidation of the BIS, but Roosevelt died before the BIS could be dissolved. President
Harry Truman suspended the liquidation and the BIS survived.
During the Bretton Woods System, the BIS operated in the background. The IMF and World Bank group for the most part managed the Global Financial
System. This all changed in 1971, when Nixon effectively killed the Bretton Woods System. Since the end of the Bretton Woods System in 1971, the BIS
has grown to prominence and its membership has exploded.They played a major role in the development of the European Union, European Central Bank and
its currency the Euro.
On 13 September 1994, the United States Federal Reserve finally seats on the Board of Directors.
In October 1995 the BIS publishes a report on the impacts of electronic currency.
In October 1999 the BIS establishes the Central Bank Governance Network.
8 January 2001 the BIS limits shareholders to central banks only and buys back all privately held shares.
1 April 2003 the BIS changes its Unit of Account from the Gold Franc to the SDR or Special Drawing Right.
20 April 2009 the G-20 creates the Financial Stability Board, which is based at the BIS in Basel, Switzerland.
BIS history for 2010 is not yet available on the website. I assume it will be after New Years and include the G-20 summits and the project to make the
BIS Unit of Account, the SDR, the global reserve currency that will replace the US dollar.
What this ultimately means is that China isn't going to be coming to the US to collect anytime soon. They are in the same boat as us, in debt and to
extent bondage to our central banks and their global bank in Basel, Switzerland.
Like the Euro and European Central Bank before, the BIS and its central banks are laying the foundations for something big, the SDR as the new global
reserve currency won't be anywhere close to the end of it.
Hopefully they have the world's best interests at heart.
edit on 13/12/10 by MikeboydUS because: Add link