Central Banks Dump America’s Debt at Historic Pace


The poor economic performance of the United States, including the antagonism the Obama administration has for business in general, has meant that the economic recovery of the United States  has been very slow, weak, and incomplete. That also affects countries in the rest of the world, so the economic slowdown damaged both the U.S. and other countries as well that typically would conduct commerce with the U.S. Although there has not been a true world-wide economic crash, there has also not been a true recovery, and many countries are now seeking to unload U.S. Treasury bonds in order to prop up their own economies.

U.S. Treasuries have always been considered the most safe and secure place for countries to invest and insure against calamity, and now that position and belief is slipping away as Obama dithers and rules in ways that will extend the economic downturn even longer.

China, Russia and Brazil sold off U.S. Treasury bonds as they tried to soften the blow of the global economic slowdown. They each sold off at least $1 billion in U.S. Treasury bonds in March.

In all, central banks sold a net $17 billion. Sales had hit a record $57 billion in January.

So far this year, the global bank debt dump has reached $123 billion.

It’s the fastest pace for a U.S. debt selloff by global central banks since at least 1978, according to Treasury Department data published Monday afternoon.

 

us debt dump

 

Treasuries are considered one of the safest assets in the world, but some experts say a sense of panic about the global economy drove the selloff.

Judging by the selloff, policymakers across the globe were hitting the panic button often and early in the year as oil prices fell, concerns about China’s economy rose and stock markets were very volatile.

In response, countries may be selling Treasuries to prop up their currencies, some of which lost lots of value against the dollar last year. By selling U.S. debt, central banks can get hard cash to buy up their local currency and prevent it from losing too much value.

There is no question that a poor performing United States causes alarm throughout the world about the potential collapse of the world economy. That is a very real concern, and Obama has done nothing to assuage the fears of traders, and the concern of the citizens of the U.S. If one were to consider objectively the accomplishments of the Obama administration they would have to conclude that he could scarcely have done worse if he intentionally tried to cause economic hardship, distrust, and anger.

That will not be reported in the mainstream media, so know-nothing college kids, ethnic groups, and aging hippies will not admit that, but a graph such as the one above shows the truth. The rest of the world does not trust either Obama or the strength of the United States economy anymore. That is truly a crime.

Source: money.cnn.com



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  1. Alfanzo

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