"China worried about 'safety' of US Treasuries" from the NY Times reports that China, the biggest underwriter of the United States exploding debt, is sounding some alarm at US Treasuries' soundness. They may be echoing concerns of US citizens as well as the Congress and Obama seeek to pile up the US debt load.
The Chinese can also garner a more favorable rate of return if the interest rates on this debt rises - as their remarks could provoke if there is flight from the US Treasuries.
Wen puts US honor on the debt line
The Chinese prime minister, Wen Jiabao, said the country was “worried” about its holdings of U.S. Treasuries and called on the United States to provide assurances that the investments were safe, and that China was watching United States economic developments very closely.
“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said at a news conference in Beijing after the final session of the National People’s Congress, the Chinese legislature.
China should be worried about their dangerous over investment in US Treasury obligations. Washington’s long-term choice is either repudiation or monetization. For monetization to be effective, the depreciation in the dollar would have to be substantial and this in turn would dramatically raise prices of imports for American consumers which would mean a tremendous drop in foreign imports. Debt monetization would cause more disruption to exporting nations than selective repudiation of Treasury debt.
Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. Find out what a growing repudiate the debt movement could mean for treasury bonds, the dollar, gold and the stock market.
The Campaign to Cancel the Washington National Debt By 12/22/2013 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts
Thanks, Ron Holland
Posted by: Ron Holland | March 13, 2009 at 07:06 PM