I have been telling my radio show listeners a readers of this blog for months that China can hurt us badly by refusing to lend us any more money. They have been cutting down purchases of our Treasury bonds recently. By doing so, only two things can happen, interest rates will have to rise significantly (putting us into deeper depression) or most likely the Federal Reserve will print money and buy Treasurys leading to a dollar collapse and inflation. China may also turn from largest buyer of Treasurys to a net seller which will only compound the problem. This is serious stuff folks as we will need to borrow trillions of dollars in the coming years. I will keep an keen eye on this situation and report to you regularly, it's that important. Chinese officials have been unusually vocal about their concerns for the dollar and their holdings of U.S. Treasury and Agency bonds. Can you believe that the economic future of our country is in the hands of Communist China?-Lou
China has 'canceled US credit card': lawmaker
WASHINGTON (AFP) – China, wary of the troubled US economy, has already "canceled America's credit card" by cutting down purchases of debt, a US congressman said Thursday.
China has the world's largest foreign reserves, believed to be mostly in dollars, along with around 800 billion dollars in US Treasury bonds, more than any other country.
But Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February.
Representative Mark Kirk, a member of the House Appropriations Committee and co-chair of a group of lawmakers promoting relations with Beijing, said China had "very legitimate" concerns about its investments.
"It would appear, quietly and with deference and politeness, that China has canceled America's credit card," Kirk told the Committee of 100, a Chinese-American group.
"I'm not sure too many people on Capitol Hill realize that this is now happening," he said.
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