Have we have been living a lie?

Managing Real Estate Broker with HomeSmart

Here's an interesting article about where the money to pay our federal employees (both active and retired) currently comes from:




Fed Now Largest Owner of U.S. Gov’t Debt—Surpassing China

Ben Bernanke

Federal Reserve Chairman Ben Bernanke (AP Photo/Alex Brandon)

(CNSNews.com) - At the close of business on Tuesday, the debt of the federal government exceeded $15 trillion for the first time--with the largest single owner of the publicly held portion of that debt being the Federal Reserve.

Over the past year, as the Federal Reserve massively increased its holdings of U.S. Treasury securities and entities in China marginally decreased theirs, the Fed surpassed the Chinese as the top owner of publicly held U.S. government debt.

In its latest monthly report, the Federal Reserve said that as of Sept. 28, it owned $1.665 trillion in U.S. Treasury securities. That was more than double the $812 billion in U.S. Treasury securities the Fed said it owned as of Sept. 29, 2010.

Meanwhile, as of the end of this September, entities in mainland China owned $1.1483 trillion in U.S. Treasury securities, according to data published today by the U.S. Treasury Department. That was down slightly from the $1.1519 trillion in U.S. Treasury securities the Chinese owned as of the end of September 2010, according to the same Treasury Department report.

Thus, at the end of September 2010, the Chinese owned about $339.9 billion more in U.S. Treasury securities than the Fed owned at that time. By the end of September 2011, the Fed owned about $516.7 billion more in U.S. Treasury securities than the Chinese owned.

The U.S. Treasury Department divides the federal government’s debt into two general categories: debt held by the public—the type owned by the Chinese and the Federal Reserve—and “intragovernmental debt,” which consists of what essentially are IOUs the Treasury gives to government trust funds such as the Social Security trust when it takes and spends their money on other things.

The current total national debt of $15.0336 trillion, reported by the Treasury today, consists of approximately $10.3145 trillion in debt held by the public and $4.7191 trillion in intragovernmental debt.

The combined $2.8133 trillion in U.S. government debt held by the public that is now owned by the Federal Reserve and the Chinese equals more than 27 percent of all U.S. government debt held by the public.

Currently, foreign entities, including those in China, own $4.6603 trillion of the U.S. government debt held by the public. These foreign entities, together with the Federal Reserve, own a combined $6.3253 trillion of the U.S. government’s debt held by the public.

That $6.3253 trillion in Federal Reserve-and-foreign-held debt equals more than 61 percent of the U.S. government’s publicly held debt.


This is the end of the article - my comments are below:


So, on a macro/global economic scale, what does this mean for real estate prices?

It means there is no money for buying housing, period. We have become a nation of sharecroppers, living in a giant ponzi scheme economy, created and run for the benefit of the elite bankers and their political puppets. The government and the banks went broke years ago, and have been creating "funny money" ever since - that's why prices keep going up. (real estate was included, for a long time)


Who benefits?

In a nutshell, not you or me! Government employees and bankers benefit, the rest of us fight over the scraps from their table. When 50% + of the housing in the nation is underwater, we are the sharecropper nation of slaves to our plantation owners - the mega-banks, and their government stooges.


What can be done about it?

There is severe economic and government contraction coming, whether we like it or not. It doesn't matter whether you believe me or not, it's going to happen - the only question is when.


So what's going to happen to real estate prices in the US?

Where the government prints money and hands it out, prices will go up. There is no "real" real estate market. (comparatively speaking of course) Where you have no government created "handouts of funny money", prices will either go down slowly, or the entire system will implode and we'll rebuild after a global financial "reset". Our choice is between severe economic pain (like 50% cut in all government spending immediately), or the literal collapse of our government and our country.



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