The United States has become dangerously dependent upon the whims of foreign investors, to help finance its massive budget deficits, and prevent a surge in long-term interest rates, which would have a devastating impact on the US-economy. If bond or currency traders detect that big investors in US-government bonds, - such as China, Japan, OPEC, Russia, and Brazil, have ceased to buy US Treasury debt, or worse yet, are becoming net sellers, it could spark a sharp slide in US-Treasury notes, sending yields sharply higher, and ignite a free-fall in the US-dollar.

Last week, the US Treasury tried to reassure bond and currency traders, that foreign investors haven’t abandoned the American debt markets, despite the avalanche of new debt that is swamping the market. The US Treasury claims that China and Japan were net buyers of a combined $48.5-billion of Treasuries in March, and that Moscow was a net buyer of $8.3-billion. Yet the reliability and accuracy of the TIC report should be viewed with a grain of salt, and a healthy dose of suspicion, - perhaps, the figures were conjured-up under the guise of “mark-to-make-believe” accounting.

President Barack Obama’s stimulus program could boomerang and destabilize the US-economy. No one is asking who will purchase the remaining $1-trillion of US Treasuries to be auctioned by September. Once that colossal amount of paper is bought, who will purchase another $5-trillion of Treasury paper over the next four-years, as the US-government plunges deeper into insolvency? The Federal Reserve would be forced to print (monetize) vast quantities of US-dollars to pay the principal and interest on the national debt that is not covered by tax revenue.