Wednesday, January 19, 2011

Exponential Growth

International TIC flows yesterday showed that China was a net seller of 11.2 trillion in American treasury debt for the month of November.

As of last month there has been a change in the largest holder of United States treasury debt with China now moving into second place.  The largest holder today?

The Federal Reserve.

As foreign countries continue to move away from our debt, look for the debt chart below to soon mirror the size of the Federal Reserves balance sheet, meaning the amount of printed currency that will be needed to fund our deficit.

And as night follows day, the chart of the price of gold will soon follow.

United States debt growth from 1940 to present:


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