Foreign-Held Dollar Debt

One of the sad consequences of the structural trade deficit is that the Greenback is being held hostage by foreign financial interests. Any of these interests can move against the Greenback at any time they like by just selling off their bond holdings. Foreign-held dollar debt has become a weapon in the equivalent of an economic Cold War. Just as nuclear weapons were held for most of the twentieth century like a sword of Damocles over the countries of the world, so now are dollar reserves held over the head of United States financial markets. To say the least, this put United States stock and bond investors in a difficult position. And makes gold, the stand alone asset, a critical holding for the people who understand the dangers this tenuous synergy implies.