Yesterday we implied a difficult question when we illustrated the huge size of US Treasury bond holdings that China and Russia have between them - accounting for 25% of all foreign held debt - implicitly funding US standards of living (along with the Federal Reserve). The difficult question is "Can the U.S. really afford to greatly anger the rest of the world when they are the ones that are paying our bills?" What is going to happen if China, Russia and many other large nations stop buying our debt and start rapidly dumping U.S. debt that they already own? If the United States is not very careful, it is going to pay a tremendous economic price for taking military action in Syria.
Via Michael Snyder of The Economic Collapse blog,
At this point, survey after survey has shown that the American people are overwhelmingly against an attack on Syria, people around the globe are overwhelmingly against an attack on Syria, and it looks like the U.S. Congress is even going to reject it. But Barack Obama is not backing down. In fact, ABC News is reporting that plans are now being made for a "significantly larger" strike on Syria than most experts had expected.
If Obama insists on going forward with this, it will be the greatest foreign policy disaster in modern American history.
Right now, both Russia and China are strongly warning Obama not to attack Syria. And Russia is not just warning Obama with words. According to Bloomberg, Russia has sent quite a collection of warships into the region...
Russia is sending three more ships to the eastern Mediterranean to bolster its fleet there as a U.S. Senate panel will consider President Barack Obama’s request for authority to conduct a military strike on Syria.
Russia is sending two destroyers, including the Nastoichivy, the flagship of the Baltic Fleet, and the Moskva missile cruiser to the region, Interfax reported today, citing an unidentified Navy official. That follows last week’s dispatch of a reconnaissance ship to the eastern Mediterranean, four days after the deployment of an anti-submarine ship and a missile cruiser to the area, which were reported by Interfax. Syria hosts Russia’s only military facility outside the former Soviet Union, at the port of Tartus.
China is also letting it be known that they absolutely do not want Obama to hit Syria. On Friday, China issued a warning about what military conflict in the Middle East could do to "the global economy"...
"Military action would have a negative impact on the global economy, especially on the oil price – it will cause a hike in the oil price."
And according to Debka, China has also deployed "a number of warships" to the region...
Western naval sources reported Friday that a Chinese landing craft, the Jinggangshan, with a 1,000-strong marine battalion had reached the Red Sea en route for the Mediterranean off Syria. According to DEBKAfile, Beijing has already deployed a number of warships opposite Syria in secret. If the latest report is confirmed, this will be the largest Chinese deployment in the Middle East in its naval history.
If the U.S. attacks Syria, Russia and China probably will not take immediate military action against us.
But they could choose to hit us where it really hurts.
According to the U.S. Treasury, foreigners now hold approximately 5.6 trillion dollars of our debt. Over the past couple of decades, the proportion of our debt owned by foreigners has grown tremendously, and today we very heavily depend on nations such as China to buy our debt.
So what would happen if China, Russia and other foreign buyers of our debt all of a sudden quit purchasing our debt and instead started dumping the debt that they already own back on to the market?
In a word, it would be disastrous.
As I have written about previously, the U.S. government will borrow about 4 trillion dollars this year.
Close to a trillion of that is new borrowing, and about three trillion of that is rolling over existing debt.
If China and other big foreign lenders quit buying our debt and started dumping what they already hold, that would send yields on U.S. Treasuries absolutely soaring.
And we have already seen bond yields rise dramatically in recent weeks. In fact, on Thursday the yield on 10 year U.S. Treasuries briefly broke the 3 percent barrier.
So what is going to happen if the yield on 10 year U.S. Treasuries continues to go up? The following are a few consequences of rising bond yields that I have discussed in previous articles...
-It will cost the federal government more to borrow money.
-It will cost state and local governments more to borrow money.
-As bond yields go up, bond values go down. In the end, rising bond yields could end up costing bond investors trillions of dollars.
-Rising bond yields will cause mortgage rates to skyrocket. In fact, we are already starting to see this happen. This week the average rate on a 30 year mortgage hit 4.57 percent.
-Higher interest rates will mean a slowdown in economic activity at a time when we definitely cannot afford it.
-As economic activity slows down, that will be very bad for stocks. When the next great stock market crash happens (and it is coming), equity investors could end up losing trillions of dollars of wealth.
-Of course the biggest threat of all is the 441 trillion dollar interest rate derivatives time bomb that is sitting out there. Rapidly rising interest rates could potentially bring down several of our "too big to fail" banks in rapid succession and throw us into the greatest financial crisis the nation has ever seen.
Are you starting to get the picture?
And the 3 percent mark is just the beginning. Brent Schutte, a market strategist for BMO Private Bank, told CNBC that he expects the yield on 10 year U.S. Treasuries to eventually go up to 6 or 7 percent...
"4 percent (on 10-year Treasurys) somewhere around the end of the year to early next year would be a good intermediate-term level. And if you look over the longer term, I don't think that 6 or 7 percent is out of the question."
If that happens, we will experience a full blown financial meltdown.
Of course it would greatly help if Obama would back down and not attack Syria. As Vladimir Putin noted at the G20 summit, large nations such as India, Brazil, South Africa and Indonesia are all strongly against the U.S. taking military action...
In reply to the question what other country in the world may theoretically be subjected to aggression similar to that Syria is facing, Putin said, “I do not want to think that any other country will be subjected to any external aggression.”
A military action against Syria will have a highly deplorable impact on international security at large, Putin emphasized.
He said he was surprised to see that ever more participants in the summit, including the leader of India, Brazil, the South African Republic, and Indonesia were speaking vehemently against a possible military operation in Syria.
Putin cited the words of the South African President, Jacob Zuma, who said many countries were feeling unprotected against such actions undertaken by stronger countries.
“Given the conditions as they, how would you convince the North Koreans, for example, to give up their nuclear program,” he said. “Just tell them to put everything into storage today and they’ll be pulled to bits tomorrow.”
He underlined the presence of only one method for maintaining stability - “an unconditional observance of international law norms.”
Can we really afford to have most of the international community turn on us and quit buying our debt?
Of course not.
Sadly, as I noted the other day, Obama appears to be locked into doing the bidding of Arab countries such as Saudi Arabia and Qatar.
In fact, as the Washington Post reported the other day, Secretary of State John Kerry has even admitted that they are even willing to pay all of the costs of a U.S. military campaign that would overthrow Assad...
Secretary of State John Kerry said at Wednesday’s hearing that Arab counties have offered to pay for the entirety of unseating President Bashar al-Assad if the United States took the lead militarily.
"With respect to Arab countries offering to bear costs and to assess, the answer is profoundly yes," Kerry said. "They have. That offer is on the table."
Asked by Rep. Ileana Ros-Lehtinen (R-Fla.) about how much those countries would contribute, Kerry said they have offered to pay for all of a full invasion.
"In fact, some of them have said that if the United States is prepared to go do the whole thing the way we’ve done it previously in other places, they’ll carry that cost," Kerry said. "That’s how dedicated they are at this. That’s not in the cards, and nobody’s talking about it, but they’re talking in serious ways about getting this done."
Why aren't we hearing more about this in the news?
Fortunately, despite the relentless propaganda coming from the mainstream media, a lot of members of Congress are choosing to take a stand against this war. For example, U.S. Representative Tom Marino recently shared the following about why he is voting against military action in Syria...
Secretary Hagel could not tell lawmakers who the U.S. could trust among the Syrian opposition, stating "that’s not my business to trust." Like many Americans, I believe it is our duty as decision makers to be informed and confident when making choices – especially in those choices that could result in sending U.S. troops or money abroad. It is no wonder Secretary Hagel isn’t in the business to trust when more players are added daily to the growing list of ‘Syrian opposition’—many of them jihadist, terrorists, known Al Qaeda affiliates, members of the Muslim Brotherhood and enemies of the U.S. and our allies. To simplify, the Secretary of Defense was unable to tell us, after nearly three years of the Syrian Civil War, who the good guys are or if there are any at all.
And Marino is very right. There are no "good guys" in Syria. The "rebels" are murderous jihadist psychotics that would be even worse than Assad if they took power.
For much more on what the mainstream media is not telling you about the war in Syria, check out a stunning video report from investigative reporter Ben Swann that you can find right here.
The picture above comes from the official Facebook page of one of the "rebel groups" in Syria.
I am sure that you do not need me to point out that the White House is burning in the background of the picture.
These are the people that Obama wants to help?
According to NBC News, the rebels are also displaying images of the black flag of al-Qaeda on Facebook too...
The image is one of eight photos posted on the official Facebook page of the “Al-Aqsa Islamic Brigades,” a small armed Sunni rebel faction fighting with the Free Syrian Army, the main umbrella military organization of the opposition forces. Two other photos posted on the group’s page feature the widely recognized black flag of the al Qaeda in Iraq terrorist group, which operates freely in Syria.
Let's assume for a moment that Obama is successful in Syria and that Assad is overthrown.
That would hand Syria over to al-Qaeda.
Once in power, the "rebels" would slaughter or force the conversion of millions of Christians, Jews and non-Sunni Muslims that have been living peacefully in Syria for centuries.
To those that would support this war, I would ask you this question...
Is that what you want?
Do you want the blood of millions of Christians, Jews and non-Sunni Muslims on your hands?
If you are a Christian that is supporting Obama on this, I would ask you to consider an excerpt from a letter from Christian nuns in Azeir, Syria that I have posted below...
We look at the people around us, our day workers who are all here as if suspended, stunned: “They’ve decided to attack us.” Today we went to Tartous…we felt the anger, the helplessness, the inability to formulate a sense to all this: the people trying their best to work and to live normally. You see the farmers watering their land, parents buying notebooks for the schools that are about to begin, unknowing children asking for a toy or an ice cream…you see the poor, so many of them, trying to scrape together a few coins. The streets are full of the “inner” refugees of Syria, who have come from all over to the only area left that is still relatively liveable…. You see the beauty of these hills, the smile on people’s faces, the good-natured gaze of a boy who is about to join the army and gives us the two or three peanuts he has in his pocket as a token of “togetherness”…. And then you remember that they have decided to bomb us tomorrow. … Just like that. Because “it’s time to do something,” as it is worded in the statements of the important men, who will be sipping their tea tomorrow as they watch TV to see how effective their humanitarian intervention will be….
You can read the rest of that letter right here.
Also consider the following shocking video of Senator John McCain being confronted by a very emotional woman that says that her 18-year-old cousin in Syria was just killed by rebels loyal to al-Qaeda...
Any American that supports this war is aiding al-Qaeda.
Any American that supports this war is choosing to ally themselves with radical jihadist Christian killers that want to conquer the entire Middle East in the name of Sunni Islam.
If Congress votes to approve this war, then we should do what one site has suggested and send those that vote yes to Syria.
They don't even have to fight. We'll just drop them off in the middle of the "rebel forces" and entrust them into the gentle hands of the al-Nusra Front.
But of course they would never go. The ones that will be endangered will be the precious sons and daughters of other Americans.
This is not a war that has a good outcome for America. Conservative voices and liberal voices all over the country are joining together to speak out against this war.
Hopefully Barack Obama will listen and cooler heads will prevail. If not, things could spin wildly out of control very rapidly.