Here is an extract from The last Thanksgiving before GD2?By...

Here is an extract from
The last Thanksgiving before GD2?
By David Chu
Online Journal Guest Writer at http://onlinejournal.com/artman/publish/article_4059.shtml

The Federal Reserve created $1 Trillion USD from 1913 until Sept 18, 2008 since then they have created another 1 Trillion in two months and are on track to create another 1 Trillion before the end of 2008. All of this debt has to be sold into the bond market in 2009 which frankly I doubt can happen.

About five years back I began scrutinizing US T-bill holdings. Three years ago to my great surprise it appeared that both China and Japan had stopped accumulating US debt. Out of nowhere came a new category of buyers referred to as “Carribean Banks” [sic]. My understanding is that this is a nice euphemism for FED-owned hedge funds who serve as a shill buyer to keep up the appearance of demand for US debt. This practice represents monetarization of US debt. Simply put, the money gets printed in the absence of a real live bond buyer.

In the years since Richard Nixon closed the FED’s gold window in 1971 the US government has convinced foreigners to accept more bonds to roll over the debt, and more bonds in “payment” of the interest owed. The question is what happens when the foreigners want to be paid in something other than more US debt. This tipping point should usher in the Great Bond Market Collapse of 2009. Most writers worth reading identify this as a signal of the coming hyperinflation...