Congressman "China to cut back on u.s.debt purchases"

Discussion in 'General Discussion' started by Tango3, May 3, 2009.

  1. Tango3

    Tango3 Aimless wanderer

    Seems they will enable the addict no longer....

    China has 'canceled US credit card': lawmaker
    3 days ago
    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.
  2. mellingerman

    mellingerman Monkey++

    And as the US Treasury market loses buyers, the US has to raise the bond yield to attract them. Result.... inflation, a lot of inflation.
  3. ghrit

    ghrit Bad company Administrator Founding Member

    Gotta laugh a bit. "Buying debt" is a euphemism for the same things banks do when they lend you money for a mortgage, just looking at it from the bank's viewpoint. Two sides of the same coin. China and the middle east oil rich countries are starting to look at the US as a bad risk for a "mortgage." The main difference between a mortgage and a Treasury bond is that a mortgage is backed by real property, and the bonds are backed by "full faith and confidence" of dot gov. I'll lend against land LONG before I'll lend against hot air.
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