“To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.”
~ Thomas Jefferson
Written by Bryan Lutz, Editor at Dollarcollapse.com:
Debt supports the Central Banking system.
Not consumers.
You know because of this…
The average American doesn’t wake up in the morning and think,
“Today is the day! I am going to buy some US Treasury bonds.”
No one does that.
Not even the Top 0.1% of America’s wealthiest families (they do the opposite).
If you were to look at the top 0.1% wealthiest people in the country you can see where they derive they derive their wealth.
You would see that they rarely invest in US treasuries for the purposes of wealth preservation.
Instead, the largest amount of wealth comes from shares in their own publicly-traded companies.
Others have their own private companies.
When you total those together it equals $15.4 Trillion out of nearly $23 Trillion in wealth!
Now compare that to the rest of the things they own.
Everything else is worth $7 Trillion.
That’s almost half when you compare with their business ownership, but what they rarely choose to hold on to are US treasuries.
So, who holds US treasuries?
Foreign Central Banks hold about 30 – 35%.
They put US treasuries on their balance sheet to help their currency appear strong in the markets.
And the Federal Reserve, the money printer, prints money to buy up US debt after it is released on the open market. The Fed holds about another 20%. This is called Quantitative Easing (in various forms).
Next, US State and local governments buy US treasuries and add them to their pension funds.
Lastly, the rest get dumped into the portfolios of the average American who goes cluelessly to their local banking officer looking for advice.
The banking officer then pulls out what looks like a magazine of pie charts and asks you what kind of risk you are willing to take. While at the same time selling you the fact that a 7% return is phenomenal.
Hardly.
I don’t have to remind you that compounded annually gold has yielded 9% over the last 25 years.
However, the point is this:
The majority of US treasury debt is distributed to the bottom 50%.
And what’s more, 1/2 of the bottom 50%’s wealth IS debt.
It is caught up in their primary residence while they toil away for 25 years to pay for their home.
So you can see…
If there were equal opportunity in the financial system, the average American would actively seek out US treasury bonds like they do money, but they don’t.
The system feeds it to them.
Every person who eventually understands the system gets to maximizing their production by building and growing their own business.
If they do not own or run a business, they buy them by proxy. They invest in them through the equities market.
The wealthy use the system to their own advantage:
- Seek higher returns in private markets, private equity, and hedge funds
- Use tax strategies that Treasuries don’t support
- The only time these wealth families use debt is for every day expenses. Since they are wealthy, they borrow money at low cost, and pay it off a lower than or equal to the cost of inflation.
The system is not built for fairness or equal opportunity.
If it were we would more actively seek out what it produces – debt.
The closest most Americans get is to own a piece of a great company via the stock market, or…
Pursue the American Dream.
But debt… I don’t buy it.
Read the full article here