Well....somebody has to be the adult when it comes to the out of control spending in DC....It would be a gift in the long run. Not to mention tie the hands of Obama and his agenda....
Why scoop it up now when they can gobble all of it up in 2012 when Obama has the dollar driven completely into the ditch.
I hate to have to say it, but GOOD!! Its time the bartender cut off the drunk. In this case, sorry to say, the drunk is the US Government.
Oh, please, please, please, China, restrict and condense your monitary supply, so your own financial instruments can come crashing down.
Yeah great, except that the gubmint will be forced to boost interest rates to attract buyers.
I read that China currently holds $1.4 trillion of T-bills.
We haven’t been buying as much Chinese crap as before, so factories there are closing. If we’re not propping up their economy by consuming their products, they won’t have the money to lend us any more. They’ll have to be concerned with caring for their own and stifling civil unrest.
Sounds good to me. If the U.S. can’t sell bonds it can’t go into debt.
Most American investors think that China is tied to us because they need our markets, but a what point do they say:
“Who needs a customer that doesn’t pay his bills? How does that help our economy?”
Frankly, the US better balk at acquiring any more debt.
Briefly,it seems between the tainted food and lead paint problems as well as the world wide recession and their continuing energy problems,their economy has ground to a halt,he says they`re experiencing negative growth which has idled many workers,former rural people with nothing to go back to, who are a potential for civil unrest.
Uh, the reason being that CHINA doesn’t HAVE extra funds anymore to buy our debt. They are in this recession pickle also, and all this means is a few basis points increase in the interest rate the US of A will accept at our weekly treasury note auctions. BIG DEAL.
good, let us get the disaster over as fast as possible
We face a deeper recession. They face millions more out of work and revolution.
Sounds good to me.
The following definitely has something to do with it. If reserves are dropping, of their exports are plunging & factories closing, if they want to spend on their own economic stimulus in order to build internal consumer demand for the production from those factories, they would have little need to buy Treasuries at 0% return and risk being paid back with less valuable dollars.
China warns of risks from “abnormal” cross-border capital flow
http://news.xinhuanet.com/english/2009-01/06/content_10614803.htm
BEIJING, Jan.6 (Xinhua) — China faces a threat of “abnormal” cross-border capital flow because of global financial tumult, the country’s foreign exchange regulator said Tuesday.
Such capital movement, resulting from the world economic slowdown and financial crisis, will bring with it potential risks, said Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE).
China has cut interest rates and seen its economy slowing down since the global financial crisis hit the country’s exporters. That could reduce its attraction to foreign investors and lead to capital outflows.
More money flowing out of the border could increase the risk of liquidity strain in the country, which is especially dangerous amid the global financial crisis.
“Where the money will flow to is quite uncertain,” Hu was quoted as saying in a statement on the SAFE website.
China’s foreign exchange reserves had fallen for the first time since December 2003, Cai Qiusheng, a SAFE official, told a conference last month. He didn’t give specific data of when that happened or by how much.
He said the current reserves were below 1.9 trillion U.S. dollars, the level recorded at the end of September. It was the largest reserve in the world.
The SAFE will improve management on fund flows in and out of the border and more closely monitor the balance of payments, said Hu.
He urged for better risk control in managing foreign exchange reserves, which was “the last safeguard” against risks.
China’s central bank said Tuesday it will also strengthen scrutiny of cross-border capital flows and study ways to tackle “abnormal changes” in the balance of payments.
The People’s Bank of China said it will check the validity of trade payments and step up supervision on individuals carrying foreign currencies in and out of the country.
If we don’t buy their crap, they won’t fund our debt. Simple as that.
China, you’ll drink it and like it... so you can keep your cheap sh$t good and cheap.
America’s number one export is T-Bills.