Hat in hand....

Oba mama crawls to China, the new super power, and grovels. We can't survive financially without their buying our debt  and selling us everything we used to make. And we can't make  perpetual war against guys wearing towels on their heads without Chinese permission. Our treasury is buying stocks, houses, car companies, and God knows what's next.

I guess the people in charge will just have to reelect him as he is "change we can believe in". (Yes we are collectively stupid and but at least we  are politically correct).

Empires come, empires go, all fall down.


The Hidden Costs of Too Much Government Debt | Money and Markets: Free Investment Email Newsletter

But you know what Obama came home with? Not much of anything. A joint statement here. A stiff, “no questions asked” press conference there. Substantive progress was nowhere to be found.
Obama's trip to China was all smiles but no substance.
Obama’s trip to China was all smiles but no substance.

That’s disturbing — and it reflects a very uncomfortable fact: The balance of power between the U.S. and China has shifted largely in China’s favor because of our overreliance on China to fund our profligacy. In fact, I believe that this shift is one of the single biggest “hidden” costs of our massive government debt load.

Debt Costs Keep Rising,
With No End in Sight!

You don’t need me to tell you that our public debt is enormous. As of this week, it came to $12,031,299,186,290.07. That’s more than $12 TRILLION in case you have trouble grasping a number that big. In just the past decade, it’s up more than 111 percent.

Things are only going to get worse, too, because Washington has completely abandoned any semblance of fiscal discipline! We’re running ever-larger budget deficits, including $1.42 trillion in fiscal 2009 alone.

The interest cost alone on our debt last year was $202 billion. That’s enough to send every man, woman, and child in this country a $656 check. Keep in mind that those costs were artificially low because of the lowest short-term rates in history due to the Fed’s rate cuts. Moreover, the flight-to-quality rally in government bonds helped keep longer-term rates low.

As bond prices fall, rates rise, and absolute debt levels climb ever-higher. That number is going to spiral upward. In plain English, we’re going to be dedicating a larger and larger share of the U.S. budget just to pay interest on our debt. Forget about defense, health care, Social Security or anything else.