The Chinese Own Us, Right?

Includes: FXI, TLT
by: Cullen Roche

Here’s some excellent propaganda from a group that clearly has no idea how the monetary system in the United States works. This provocative commercial depicts a classroom in the year 2030. The professor is describing how great empires fail.

He claims that the USA spent and taxed its way out of a great recession and that now the Chinese (in the year 2030) “own” the USA. That’s scary stuff. There’s just one problem. When we trade with China they send us real goods and services. In return, they get fancy looking pieces of paper with old dead white men on them.

Because they have no use for this paper, they open what is the equivalent of a savings account at the Federal Reserve (by buying U.S. Treasuries). They don’t fund anything in the USA. They are not our banker. And they will never own us.