China’s Big Treasury Dump Should Scare Americans

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China’s Big Treasury Dump Should Scare Americans

BUSINESS WIRES By Wall Street Daily

America just received a disturbing reminder.

The reminder? China controls the United States’ fate as a solvent and functioning country.

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China was a net seller of U.S. Treasuries for the first time in history last year. The rogue nation liquidated $292 billion in Treasury debt, along with $92 billion in U.S. stocks.

Without China’s ongoing commitment to Treasuries, the U.S. federal government couldn’t service its debt.

In such a scenario, Uncle Sam’s subsequent default would tip the country into lawlessness and chaos.

Imagine not having police or fire rescue on duty? Or your local bank being set ablaze during the ensuing Armageddon.

According to bestselling author Peter Schiff, America will soon face the darkest period in its 240-year history, and China could spark the crisis.

“This is an important trend that people are overlooking,” said Schiff in a recent interview with Wall Street Daily. “If China isn’t there to loan us money, where’s the funding going to come from?”

Schiff is renowned for being the most accurate forecaster of the 2008 Financial Crisis.

But now he’s warning that China’s Treasury dump could trigger a system-wide federal collapse.

China Bleeds its Secret Account…

China’s unmatched appetite for Treasuries keeps America’s debt bomb from exploding.

The release of the latest Treasury International Capital data – containing all U.S. capital inflows and outflows for purchases and sales of U.S. securities – offered brand-new evidence that China’s Treasury dump is even bigger than first suspected.

The data show that U.S. Treasury holdings in Belgium, which China uses as secret proxy for its international trades, plummeted $21.9 billion at the end of 2015.

“Belgian holdings have been a point of focus due to extreme volatility,” says Jeffries economist, Thomas Simons. “This is significant because it is widely speculated that China executes trades with Treasuries held in custody in Belgium.”

When you combine the Treasury sales from mainland China with outflows in Belgium, a disturbing pattern emerges. That is, China’s Treasury dump reached $40.3 billion in December alone.

Worse yet, China isn’t the only country beginning to unload Treasuries.

Russia, Norway, Japan, Taiwan, Sweden, Italy, Poland, Singapore, and Mexico have also been abandoning U.S. debt holdings in recent months.

And Peter Schiff expects this trend to accelerate in 2016.

“This wave is going to gather momentum and go around the world,” says Schiff. “All of America’s creditors will stop lending us money.”…..More Here

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