Petraeus: Don't freak out over China dumping U.S. debt

cnn money ^ | 9-24-2015

[Citizen Zed]

There are lots of real threats to America -- but China selling U.S. debt isn't one of them.

That's the message from David Petraeus, the former four-star American military general, who now works in the world of finance.

"I don't think that China's sale of some of its holdings, in order to prop up China's currency, presents a security risk to the U.S. -- or a risk to our currency, for that matter," Petraeus told CNNMoney.

Petraeus is one of America's brightest minds on matters of national security. He served as a top military commander in charge of troops in Iraq and Afghanistan before becoming director of the CIA in 2011.

He resigned from the spy agency in 2012 following an extramarital affair, which has dogged him since. Just this week, Petraeus apologized to a Senate committee for his affair and mishandling classified materials.

Petraeus has since joined private-equity firm KKR (KKR) where he focuses on the intersection of geopolitics and macroeconomic trends. Earlier this month Petraeus made a personal investment in Windward, a maritime surveillance company that uses Big Data to track everything from potential terrorist activity to oil shipments.

[Citizen Zed]

Also these are not the droids you're looking for and pay no attention to the man behind the curtain.

[blueunicorn6]

“Petraeus is one of America’s brightest minds”

Hahahahahahaha!

“Ummmm.....can you send us some more Soldiers?”

Brilliant! Brilliant!

[Dick Vomer]

Yeah, I’m taking economics advice from a military man that doesn’t have the self discipline to keep from banging his subordinates.

I wonder what his thoughts on particle physics and string theory are?

[SERE_DOC]

yup, When I need financial advice,

I always go to disgraced general officers who dropped trou and threw his wife under the bus, and compromised confidential information. As a source of credible information.

Petraeus is a Moron

[Daveinyork]

The Fed will need to buy that debt, if they are to keep interest rates from rising.

[circlecity]

Like I’m going to take economic advice from a disgraced General who didn’t have the self discipline to keep his zipper up and his mouth shut.

[nathanbedford]

1. If the Chinese are planning an international incident or even an act of aggression in the South China Sea it is likely they would unload US treasuries to make themselves less vulnerable.

2. If the Chinese are planning such an act, it is less likely in view of the impending visit of the premier, although considering the Oriental mind, it is possible that they are playing at the Art of War.

3. If the Chinese are selling US treasuries because they need the money because they are running out of stimulus at home to shore up a crashing economy, look out below around the world.

4. It may well be that China is not the monolithic unity that it appears i.e. those in control of monetary policy might not be acting in concert with those in charge of military policy and those two might not be coordinating with those in charge of diplomatic policy.

5. Retired Gen. Petreaus has been out of the intelligence loop for a long time and there is no reason to believe that he is any better informed than the average news consumer.

[AFret.]

I always go to disgraced general officers who dropped trou and threw his wife under the bus, and compromised confidential information. As a source of credible information.

Petraeus is a Moron

I wouldn’t classify him as a moron..he knew exactly what he was doing..

[quantumman]

Their burn rate to stabilize is about $100 billion per month. They and the Saudis still have some breathing room in terms of liquidity. The sh** doesn’t hit the fan for another 9 months or so.

[4rcane]

um, he’s a military general not an economist. He’s wrong on China dumping US debt will weaken US dollar though. More sellers than buyers leads to lower prices

[Don Corleone]

Selling US debt to whom? No else can afford to buy it either.

[CodeToad]

David BetrayUS, convicted federal felon, for violation of national security.

[backwoods-engineer]

If Betrayus-for-a-Bimbo is saying this, that means the opposite is actually true, and the chickens are really coming home to roost, as many of us suspected.

America deserves every single tragedy that befalls us. We have rejected God and spat in His face.

[backwoods-engineer]

Curious: what is America’s “burn rate to stabilize”? How long do we have left?

[onedoug]

“Where are the broads? Well?”

[gwjack]

Good morning,

I think your numbers 3-5 are the likely answers. I’m re-reading “Aftershock” by Wiedemer, Wiedemer, and Spitzer. It was an NYT bestseller and acclaimed by the Wall Street Journal. They write that China is most likely the linchpin for global financial meltdown. If their economy goes over the cliff (there are some that think it already has; me among them) they can not export cheap goods, and will not need what we have (in the way of commodities and energy).

They write, “(Jim) Chanos noticed several years ago that property development in China was reaching unsustainable proportions. If the average Chinese couple makes a combined $8,000 or so a year, how can they afford condominiums that can easily cost up to $150,000? It didn’t add up. Most of this growth was driven by bad loans pushed by the government. In fact, Chanos found that many new apartment buildings stay empty and are flipped from speculator to speculator on the greater fool theory.”

We have seen this movie before - and it doesn’t end well!

I’m not generally a gloom and doom guy, but there are signs pointing to the USA going into free fall. I wish it weren’t so. Blame it on Shemitah, or the impending collapse (helped by China) of the dollar, and current debt of $18+ Trillion.

In sum, Petraeus speaks of things much greater than his current knowledge.

Gwjack

[nathanbedford]

I have followed Chanos for some years and regard him to be a pretty smart fella. On the other hand, many an investor has gone broke being right at the wrong time.

The problem with China is it is so opaque and so corrupt that one cannot begin to measure the degree of corruption and therefore one cannot even begin to assess the dangers. It is clear that China has mountainous internal problems and it does not appear that China has the flexibility to adopt the right solutions. It's opaqueness alone makes flexibility impossible and it's totalitarian rigidity makes hope for its nimbleness equally unlikely.

If the world's second-largest economy goes down catastrophically we are all in deep trouble, Obama has made us absolutely vulnerable to any tremor.

Good comments.

[gwjack]

Thanks for your comments.

“Aftershock” has the following shortly after the passage about Chanos:

“China has long been a country of mystery. Exactly when and how the Chinese bubble will pop is also somewhat mysterious. But, there is no question that the country is currently on an unsustainable path and that their bubble economy will pop. This dragon is blowing more smoke than fire.”

I find it odd that the President of China (Xi Jinping) is in the US, and his first meetings were with technology barons of Silicon Valley.

One of the things I’ve read, but never really considered, is the fragility of the German export market if China crumbles. Do you have thoughts about that? I heard (can’t remember the source) that the German economy is not as strong (because of China) as what it appears. Valid?

Gwjack