Please Help Me Understand What's Going On Here

I am not an economist by any means.  I have learned a lot from the school of hard knocks and I have advanced degrees in engineering and management, but I am certainly not an expert in the world of high finance -- the Washington D.C. variety, that is.

Please watch this video on YouTube entitled "Economic Apocalypse : China is the next Financial Bubble'"

http://www.youtube.com/watch?v=ndoJHxX3cKA&feature=related

After that, please help me understand how one can ISSUE debts instruments to borrow money and then turn around and BUY those same debt instruments himself or herself?  If one has the money to buy one's own bonds, why bother with the exercise of borrowing in the first place?

Isn't that what the US Federal Reserve is doing right now?  The Fed is buying Treasuries issued by the US Government.  The US Government issued the Treasuries to raise money to finance it's bloated deficit spendings because it does not have the cash to do so.  The Fed is an arm of the US Government.  And the Fed is buying up those very same Treasuries that the US Government issued to raise money.   I seem to get the nasty feeling that the US Government is running around in circles, like a dog chasing it's own tail.  The only difference being as they are running they keep churning up more dusts that magically turns into US Dollars and get injected into the nation's money supply.  Why is it then that the value of the US Dollar kept going up against the Yen, the Euro and other major world currencies when the US money supply is getting so over-bloated and there is no way for the purchasing power of the US Dollar to go but down the drain as a result?

So, why doesn't the US Government just turn to the Fed and borrow from the Fed instead?  Actually, why do they even need to borrow when The Federal Reserve, their central bank and lender of last resort for one and all,  has all kinds of money stashed away in every nook and cranny in Washington D.C. and all the way to sunny California in the west, North Dakota in the north and Texas in the south just waiting to be discovered, mined, digged out and used to finance all kinds of bailouts of Zombie US corporations deemed to be "to big to fail" and all kinds of pork-belly projects of individual congressmen, senators and the executive branch of the US Government? 

Oh, by the way, the latest Zombie corporation to fall may very well be the venerable General Motors, whose CEO Rick Wagoner, is reportedly being forced to resign today by none other than the omni-present and omni-potent Khun Obama-san of 1600 Pennsylvania Ave NW, Washington, DC 20500, USA.

We have all heard about the great Investment Ponzi Scheme of the Century perpetuated by Bernie Madofff and Company in recent months.  But, it pales into insignificance when compared to the massive Ben Bernanke  Ponzi Scheme that is currently being shown in a US TV newscast or cablevision news channel near you.

On Friday night Thungsin asked a question about why the present Thai Government is borrowing money from foreign lenders when it has so much foreign reserves available.  He said why not borrow from the Bank of Thailand instead of borrowing from the Japanese Government or Chinese Government or some other countries.  Is he thinking along the same line of logic as the Fed and/or the US Government?  The left pocket borrowing fom the right pocket of the government, dipping into the cookie jar of the country's foreign exchange reserves?  A brilliant idea indeed!

Keep in mind that this is the same idiot who claimed the Democrats destroyed the Thai economy during Chuan Leekpai's government by borrowing too much  money from the IMF to tide the country over from the 1997 financial crisis. 

He had conveniently forgotten that he was part of the Thai Goverment BEFORE Chuan Leekpai and the Democrats were appointed to take over the administration of the country and rescue the country from the brink of bankruptsy because the brilliant PM at that time, ex-General Chavalit Yongchaiyud, and his Cabinet (in which Thugsin was a minister) had practiclly run the Thai economy into the ground. 

The standing joke was, if you want to solve the traffic congestion problem in Bangkok, just appoint Gen. Chavalit as the PM of the country.  50% of the vehicles on Bangkok's roads will disappear soon after his appointment.

Thugsin also conveniently forgot that he was one of the "chosen few" with inside information about the impending Thai Baht devaluation (thanks to one of his faithful minions the then TMB president Thanong Bidaya) who bought up all the US dollars he could get his hands on with a large amount of Thai Baht overdraft from his "friends" in the government banks and thus profitted immensely from the Thai Baht devaluation , practically overnight, after the devaluation was announced.  The day before the devaluation Gen Chavalit was still publicly proclaiming with a straight face that there will be no Baht devaluation, even after his Finance Minister had abruptly quit that very day due to a policy disagreements within the Cabinet.

When Thugsin came into power he quickly announced that his new government do not need to borrow money and will quickly repay all outstanding loans from the IMF to show how smart he is and how superior he is compared to Chuan.  Indeed he did repay the outstanding IMF loan quickly, but not before issueing a very large amount of Thai Baht bonds to do that.  Maybe bonds are not debt instruments in this smart alec's mind.  Bonds do not represent "borrowings."  They are just pieces of paper people use to cover their walls at home and in their offices!  After all, the US Federal Reserve can create US Dollars out of thin air, so why not Thugsin the Mother of all Thai Magicians. 

The next time you meet up with him just ask him where all the tens of billions of Bahts in profits from the illegally set-up 2- and 3-digit Government Lottery scheme went.  Correct me if I am wrong, but I understand that none of the money went to the National Treasury.  I guess it is just very easy for extremely skilled magicians like him to both create money out of thin air and make them disappear into selected pockets at the same time through "Executive Orders" without the need to ask for Parliamentary review and approval.  Hey, maybe that's the kind of democracy he has always been preaching about, yeah? 

I always thought that there was something missing in is sermons, but now everything is clear and it really rings a bell.  That's why I keep wondering and asking myself whether I should change my profession to that of Magician instead of Little Me.  I bet it would really be fun and enjoyable (and profitable, too)!

Take care and have a nice day.