No more USD's for China?

Discussion in 'The Fire For Effect and Totally Politically Incorr' started by Marlin T, Dec 19, 2009.

  1. Marlin T

    Marlin T Active Member

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    Do you think that this might put a brake on the out of control spending?
    Or is this where the Piven strategy comes into play?

    ______________________________________

    Published on ShanghaiDaily.com (http://www.shanghaidaily.com/)
    http://www.shanghaidaily.com/sp/article/2009/200912/20091218/article_423054.htm


    Harder to buy US Treasuries
    Created: 2009-12-18 0:13:35
    Author:Zhou Xin and Jason Subler


    IT is getting harder for governments to buy United States Treasuries because the US's shrinking current-account gap is reducing supply of dollars overseas, a Chinese central bank official said yesterday.

    The comments by Zhu Min, deputy governor of the People's Bank of China, referred to the overall situation globally, not specifically to China, the biggest foreign holder of US government bonds.

    Chinese officials generally are very careful about commenting on the dollar and Treasuries, given that so much of its US$2.3 trillion reserves are tied to their value, and markets always watch any such comments closely for signs of any shift in how it manages its assets.

    China's State Administration of Foreign Exchange reaffirmed this month that the dollar stands secure as the anchor of the currency reserves it manages, even as the country seeks to diversify its investments.

    In a discussion on the global role of the dollar, Zhu told an academic audience that it was inevitable that the dollar would continue to fall in value because Washington continued to issue more Treasuries to finance its deficit spending.

    He then addressed where demand for that debt would come from.

    "The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

    "The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," he added. "The world does not have so much money to buy more US Treasuries."

    China continues to see its foreign exchange reserves grow, albeit at a slower pace than in past years, due to a large trade surplus and inflows of foreign investment. They stood at US$2.3 trillion at the end of September.






    Copyright © 2001-2009 Shanghai Daily Publishing House
  2. Jim K

    Jim K New Member

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    The U.S. is broke and has been for decades. The only thing keeping the government alfoat is the huge amount of our worthless government paper bought by foreign governments, mostly the Chinese. In other words, China now owns the U.S.

    The only reason they keep buying our "junk bonds" is that we have quietly agreed to allow them total access to the U.S. market and to suppress any American company that tries to compete with them. And don't blame Obama; the situation goes back decades, over administrations of both parties. Silly idea? Watch how one after another successful American company is taxed out of existence or prosecuted for fake anti-trust violations. And the big unions are in on it. Let any group of American workers even think about working for less in order to compete with China, Inc., and watch the union crack down on them.

    Jim
  3. graehaven

    graehaven Well-Known Member

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