America may be referred to as the "Home of the Brave" because when the bills arrive it takes a lot of courage to open them up, especially when you must turn around and face your wife and kids with a straight face. When it comes to paying bills these days, America just doesn't feel like the land of the free any longer. To be truly free you must be debt-free; if you're not, your creditors own you. Americans now owe a staggering $16 trillion dollars ($2.4 Trillion in personal loans, and $13.6 trillion borrowed from their house). Yet, as a society, we just can't seem to get away from accumulating debt, and have become nothing short of debt slaves. The American consumer continues to abuse credit that has been offered to them, and pay incredibly high interest charges every month, without blinking an eye. To maintain a certain lifestyle that would ordinarily be unattainable with their current income levels, our nation of consumers is slowly but surely being eaten alive by our own conspicuous consumption.

In May, Personal Savings ranked in at a negative 1.4 percent of income (or a minus $140 billion annually). Consumers are still not saving enough and continue using credit to offset any shortfall in income just to keep up with normal expenses like a mortgage, groceries, and gas because they have chosen to live extravagantly. One major cause of our country's need to import massive amounts of foreign capital to keep our economy afloat stems from a weary American consumer struggling to live and pay the rent, but behaving like they're rich. The United States might be the only superpower but we still owe Japan and China each about a trillion dollars. (We owe even more to the Gulf Arabs.) With no savings, America continues to run an $800 billion dollar trade deficit. We are effectively giving America away to our creditors and if we continue to give more and more away, we will lose the ability and the will to take back control and ownership of our own economy. Not only are Americans, individually, becoming debt slaves, but the country on a national level is losing its independence this 4th of July, one manufacturing job and one container shipment at a time, as jobs continue to go overseas. Even though our elected officials know that letting Japan and China manipulate their currencies will undercut American manufacturers and workers, our national policy still caters to them. Our government may feel they have no choice but to look the other way because when you owe $2 trillion dollars, you have to remember the golden rule: China and Japan have the gold so they make the rules. The White House knows that if we annoy our largest creditors, they could very easily sell the dollar. If that happened, interest rates would be forced up and the stock market would crash. The joke, of course, is that it is Americans borrowing against their houses and buying foreign goods that gives Japan and China our money and puts our nation in their debt. But I can't help but wonder how long the United States will remain the superpower it is if we continue to give other nations so much power over us?

With the White House losing power and credibility, it's becoming more likely that Congress will start calling the shots. A key reason the Democrats won The House and Senate is that they actually wanted to do something about jobs going overseas, and to address the issue of unfair currency manipulation by Japan and China which is subsidizing exports to America. However, if Congress starts to force the currency manipulation issue, the likely outcome has "1987 stock market crash" written all over it. Why? If America "sticks it" to Japan and China, the Yen carry trade will collapse and China will start taking their money out of the dollar. This could have dire consequences! Who then is left for America to borrow from? The Gulf Arabs want to diversify away from the dollar, and Russia, which wisely prefers the Euro, has told us to take a hike. The international front for the dollar and dollar investments is already precarious. One by one, countries are showing less love for the dollar, and are unwilling to hold all investments in U.S. Treasuries and Agency Securities. Even Kuwait the country we went to war to save is diversifying from the dollar. The big trade surplus countries are setting up separate investment funds to diversify away from U.S. Treasury debt. This new trend does not bode well for keeping long-term U.S. interest rates low, or preventing the dollar from spiraling downward. Currency realignment is inevitable, but forcing the issues offers great risk to owners of dollar assets, such as stocks and bonds.