Posted on 10/15/2013 7:35:37 PM PDT by TexGrill
The Chinese sure are doing a lot of worrying these days about the stalemate in Washington. Li Keqiang, Chinas Premier, told U.S. Secretary of State John Kerry that he was watching the tussle over raising the governments debt ceiling with great attention in a meeting last week. He has good reason to be concerned. With a stash of nearly $1.3 trillion in Treasury securities, China is the worlds largest foreign owner of U.S. government debt. If the U.S. Congress fails to lift the ceiling to allow the government to borrow more by Thursday, Washington may not have enough money to pay its bills, potentially leading to a default. That could sink the value of Treasuries wiping out a big chunk of Chinese wealth in the process.
That possibility has caused much consternation in China. In a blistering (and highly hypocritical) editorial, state news agency Xinhua blasted what it sees as Washingtons irresponsibility in handling global affairs and called for greater say for developing nations in international institutions like the IMF and a new reserve currency to replace the dollar.
(Excerpt) Read more at business.time.com ...
Rather like the US got in bed with the British treasury in 1927, and after supporting them for 2 years, US investors got wise around 1929...
With a stash of nearly $1.3 trillion in Treasury securities, China is the worlds largest foreign owner of U.S. government debt. If the U.S. Congress fails to lift the ceiling to allow the government to borrow more by Thursday, Washington may not have enough money to pay its bills, potentially leading to a default. That could sink the value of Treasuries -- wiping out a big chunk of Chinese wealth in the process.That's not China's problem. Number one, there will not be any default, there literally can't be. Number two, the real problem China has is, it is a rat on a wheel, forced to purchase US debt to prop up the promiscuous overspending in order to maintain the relative valuation of the Yuan to sustain their trade surplus to the US market.
Defaulting on the debt would be better than the hyper inflation that will surely come from printing 80 billion dollars every month. Devalued currency hurts the people with higher prices while default hurts the governments ability to borrow more money. Shut it down.
If deflation hits then China will need to seek large trade deals with India and Brazil - devaluing the yuan and risking an internal civil war.
Because of all of this, China absolutely loves buying our debt - even if the current propaganda campaigns say otherwise.
Watch the bankers. That will tell you what the politicians are about to do.
We owe them?
I don't think they read the agreement with Treasury.
United States Free Enterprise, INC.
INVOICE
Your Treasury certificates are your payment receipts. Thank you.
Washington will have quite enough money to continue to pay the interest on the debt. There might not be enough money to pay for some other things but if the decision is made to not pay the interest in order to continue to fund obamaphones that is a decision, not an inevitable outcome.
Well said!
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