You’ve heard it a hundred times in the drive-by media. Almost all of our federal debt for the last 2 or 3 years hasn’t been purchased by China.
The truth is that China still owns most of our debt, but they aren’t buying any more of it.
Every time there’s an auction of U.S. Treasury bills, almost all of them are bought – are you sitting down? – by the Federal Reserve.
Clever, isn’t it? We’re running an annual deficit of $1 trillion plus, and we’re paying for it by printing money. Genius!
(The Federal Reserve denies they are “printing money” because it’s all done electronically. Hello! Tell that to my credit card company or my bankruptcy judge.)
Normally when the money supply increases, there is inflation.
We should definitely be having inflation now, with this multi-trillion-dollar increase in the money supply, because the net number of jobs has remained virtually constant for four years now. Wages have actually decreased, which itself increases the money supply.
Where is all that money? It’s in Wall Street. Stocks aren’t going up because profits are so good. There’s been a steady decline in profits for four years now, and they’re almost nil at the present time.
Inflation now takes the form of inflated stock values. That’s how Washington and Wall Street have rigged it. Brilliant! Another way for the rich to rob the poor.
