For the last 35 years, most American money has eventually ended up overseas, because that's where we get our stuff. The companies that take in the money, trade it to their governments, for local money, that they can use for operating expenses and to expand their business. These governments trade the American money back to the US government for bonds, that they then hold, collecting interest. They use these bonds as the basis to print local money, as their own economies expand.
American national debt is now 10 trillion dollars. Most of it is held by foreign governments. America doesn't have the money to service this debt, it must create new debt to do it. The American public is still sending money overseas to get stuff. The amount of debt created now increases exponentially. The US government is behaving exactly like the insolvent homeowner, who gets mortgages on which the interest doesn't have to be paid but increases in principle and maintains a lifestyle he can't afford by continually refinancing his house on the strength of it's supposed increase in value. All the money received during the frequent refinancing, ends up overseas, to be traded for more interest bearing, US government bonds.
This is a classic economic bubble. It is not under control. It cannot be be brought under control. It will burst. If not now, sometime in the future. When this happens, it won't be good. This is the main problem facing the US economy. Declining real estate values have nothing to do with it, they simply cause the real problem, which has not yet surfaced, to be glimpsed. This is what makes the markets, world wide, shivver.
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