Trump provides a tax break and its main funding gent for money, China, says they do not want to buy US Treasuries. That sounds like a tremendous problem. With raising interest rates, an inflated and increasing stock market, political turmoil, and potential wars looming who is going to fund all of this if China does not. We have had unprecedented levels of borrowing by citizens as well as companies like GE that have increased their borrowing dramatically. Amazon got a $16 billion dollar loan back in August. I have reflected on other news stories that have highlighted the incredible US debt on a retail level, a corporate level, and of course the Federal. What will happen of the pendulum swings back past historical averages of 6% to the incredibly high rates of 18% during the 80’s? It has often been stated that China lends money to the US, so that the citizens can buy the products China makes. China then continues to build its massive One Belt One Road Initiative, owning massive ‘city sea ports’ and driving growth through the massively overpopulated Asian countries and into Europe. It seems less and less interested in funding US treasuries.
This article seems to continue to reflect the lack of confidence in the Fed, the US dollar and perhaps the whole notion of fiat currency. We have followed China and its accumulation of actual wealth and assets and must wonder if they see the writing on the wall.
It is doubtful. It would seem like the Fed is running out of tricks... but perhaps crypto currencies will open the door to pools of money creation?