Ominous Signs from China
The fact that our Secretary of State must now publicly call on China to keep buying our Treasurys is an indication that our biggest investors are starting to see their confidence in America wane.
If China stops buying Treasurys, then the so-called “credit crunch” of the last 6 months, will soon look like the Roaring ’20s. At that point, our government will have three choices: (a) radically cut spending–in ways that result in massive firings of federal employees and contractors; (b) default on our bond payments, which would be an economic earthquake measuring about 10 on the Richter Scale and would take most of the world down; (c) print more money, creating monetary disasters on par with Weimar Germany, Argentina, Bosnia-Herzegovina, and Zimbabwe.
Unemployment would easily exceed Great Depression levels.