Friday, March 13, 2009

China "Worried" About Safety Of US Treasury Bonds, Asks For Credit Guarantee

This is pretty disturbing news considering President Obama has mortgaged our country's future with unprecedented out-of-control Federal spending.

China, America's largest creditor, says it is it "worried" about the safety and security of U.S. Treasury bonds and is asking “the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets,”

The Wall Street Journal reports:

BEIJING -- Premier Wen Jiabao voiced confidence in China's economy, saying his government's finances give it room to spend even more to support growth if needed, but expressed concern about the outlook for the U.S. and the safety of its Treasury bonds.

The forceful comments from Mr. Wen's annual press conference -- a rare opportunity for domestic and foreign reporters to ask a top Chinese official questions directly -- helped depress the U.S. dollar and prices of U.S. Treasurys in Asian trading Friday.

The public airing of his concerns reflect how the relationship between China and the U.S. has been evolving under the pressure of the financial crisis. For years the U.S. has pressed China to change the way it runs its economy, such as by opening up its financial system. But in the last year China's government has been increasingly vocal about what it sees as U.S. economic mismanagement. And as the U.S. government's largest creditor, it has become more assertive in trying to ensure its interests receive a hearing.

"We have lent a huge amount of money to the U.S., so of course we are concerned about the safety of our assets. Frankly speaking, I do have some worries," Mr. Wen said in response to a question. He did not offer specific suggestions on economic policy to the U.S. government, but called on it to "maintain its credibility, honor its commitments and guarantee the security of Chinese assets."

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2 comments:

  1. This is quite disturbing, especially when Obama wants to spend more and borrow more. China is getting very close in not lending to us.

    So, what happens if something unforeseen happens and we need more money in an emergency, like a natural disaster? Where is that money going to come from? Answer: Nowhere. Who gets hosed? Answer: The citizens.

    http://franklinslocke.blogspot.com/

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  2. 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

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