Friday, November 19, 2010

Buying GM stock

Yesterday, General Motors (whom the gov't. bailed out) sold its IPO (Initial Public Offering) of new stock as well as other investors began trading in this stock. General Motors (GM) raised a bundle of cash to supposedly pay back some of the money that the gov't. gave it.
The big problem is that prior to this IPO, the Chinese army sold off U.S. Treasury bills to raise enough money to purchase 18% of the GM stock. Since China holds the largest amount of our debt, and the dollar is becoming almost worthless, the Chinese want out of any U.S. paper obligations. Instead, as they've been doing around the world, they actually ended up "trading" bad debt for an 18% stake in our largest automobile company, knowing that our gov't. won't let it fail.
This is like my mortgage company trading my mortgage for the supermarket in town. Pretty clever of those Chinese. They've been using our Treasury bills to buy up hundreds of square miles of natural gas saturated land in this country and buying up huge amounts of natural resources all over the world.
If you think that the Middle East is holding us "hostage" with their oil, get ready for China to "call the shots" on everything else.
You'd better learn to speak Chinese as they will be your masters in a few short years.

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