Putin Got Obama Hanging By the Balls

Financially speaking, of course. But no wonder Russia’s president Vladimir Putin hardly bothered to comment on the almost hysterical Barack Obama the other night, calling him a “jackass” and a “dick”.  America owes Russia 138 billion dollar. Together with his good buddy and neighbour,  Xi Jinping of China, the two trade partners now control about 1,5 trillion dollar, or 25%,  of all US debt. That means they almost control the United States of America.

“The end of “easy money” in the US is going to fundamentally influence the global economy.”

Aleksey Kudrin

 

G20SUMMIT

I think I know what kinda feelings that made US president, Barack Obama, go nuts over Russia’s president, Vladimir Putin at the opening day of the G20 meeting in St. Petersburg. Imagine; visiting your bank, where you’ve been a loyal on-time-paying customer for 20 years, just to make sure that your credit cards will be renewed when they expires at end of the year: “We’re very sorry, but your application is denied due to changes in our credit rating practices” Jackass! Let me talk to the dick in charge!

I’m not sure, but it seems like a plausible explanation.

Mr. Obama comes to St. Petersburg to gain support for his plan to launch a military attack on Syria. Instead the other state leaders starts nagging him about all the money he have borrowed on behalf of the American people and how he plans to come up with the 3 trillion dollar needed to renew existing loans due this year.

China urges the United States to be “mindful of the spill over effects” of the planned tapering of the country’s monetary stimulus , Zhu Guangyao, China’s vice finance minister said during a meeting with Russian President Vladimir Putin at the G20 summit. The US should “work to contribute to the stability of the global financial markets, and the steady recovery of the global economy,” Zhu added.

Talking exclusively to Russia Today, Russia’s former finance minister Aleksey Kudrin says the end of “easy money” in the US “is going to fundamentally influence the global economy”. However, though the tapering could be extremely painful right now, countries around the world need to reconcile the thought that such money injections could be just temporary, Kudrin says.

“Now we are witnessing an attempt to win time to reform the economy, to consolidate budgets, to cut expenses, to increase taxes, to overhaul social welfare, to stimulate some of the industries. … At a certain point this additional stimulus will have to be gone and the economy will have to function on its own,” he says.

“Will it (the global economy) be able to? Which countries won’t cope with the situation? We still don’t know. So, we’ll have to adapt to this new kind of situation. This is going to be a challenge”, Kudrin concludes.

A challenge, indeed.  What Mr. Kurdin is saying implisit is that some countries will NOT make it.

And here comes the scary part:

Vladimir-PutinAt the moment, America owes other nations 5,6 trillion dollar, according to the  US Treasuruy.

As it turns out, Russia and China holds about 25% of it. Imagine that! Imagine what may happen if they should decide to dump the whole load at the market, followed by a few other nervous investors.

That’s right. Disaster. But what does that really mean in this context?

Thanks to The Economic Collapse Blog, here’s a brief summary:

These are a few consequences of rising bond yields on 10 year US Treasuries.

  • It will cost the federal government more to borrow money.
  • It will cost state and local governments more to borrow money.
  • As bond yields go up, bond values go down.  In the end, rising bond yields could end up costing bond investors trillions of dollars.
  • Rising bond yields will cause mortgage rates to skyrocket.  In fact, we are already starting to see this happen.  This week the average rate on a 30 year mortgage hit 4.57 percent.
  • Higher interest rates will mean a slowdown in economic activity at a time when we definitely cannot afford it.
  • As economic activity slows down, that will be very bad for stocks.  When the next great stock market crash happens (and it is coming), equity investors could end up losing trillions of dollars of wealth.
  • Of course the biggest threat of all is the 441 trillion dollar interest rate derivatives time bomb that is sitting out there.  Rapidly rising interest rates could potentially bring down several of our “too big to fail” banks in rapid succession and throw us into the greatest financial crisis the nation has ever seen.

Are you starting to get the picture?

 

This is one of those articles that makes you go hmm…

Full Story&Documentation @ The Economic Collapse Blog

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2 Comments

Filed under International Econnomic Politics, National Economic Politics

2 responses to “Putin Got Obama Hanging By the Balls

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