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Old 05-03-2009, 08:59 PM
 
1,535 posts, read 1,628,994 times
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China has 'canceled US credit card': lawmaker
Published: Thursday April 30, 2009


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China, wary of the troubled US economy, has already "canceled America's credit card (http://rawstory.com/news/afp/China_has_canceled_US_credit_card_l_04302009.html# - broken link)" by cutting down purchases of debt, a US congressman said Thursday.
China (http://rawstory.com/news/afp/China_has_canceled_US_credit_card_l_04302009.html# - broken link) 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.
The Republican lawmaker said that China was justified in concerns about returns from finance giants Fannie Mae and Freddie Mac, which were bailed out by the US government due to the financial crisis.
Kirk said he was the first member of Congress to tour the Bureau of Public Debt, which trades bonds, and was alarmed at how much debt was being bought by the US Federal Reserve due to absence of foreign investors.
"There will come a time where the lack of Chinese participation may have a significant impact," Kirk said.
"We should track that, because up until last month they were the number one provider of currency to the United States and now they're gone."
With China's economy also hit by the global economic crisis, Premier Wen Jiabao has openly voiced concern about the status of his country's investments in the United States.
China has also floated replacing the dollar as the key international currency with a basket of units bringing in the euro, sterling and yen.

The Raw Story | China has 'canceled US credit card': lawmaker (http://rawstory.com/news/afp/China_has_canceled_US_credit_card_l_04302009.html - broken link)
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Old 05-03-2009, 09:02 PM
 
Location: Great State of Texas
86,052 posts, read 84,169,407 times
Reputation: 27718
Shouldn't be news. Remember when the Fed announced they would be buying Treasuries ?
This is the reason and they have buying more and more each auction.
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Old 05-03-2009, 09:03 PM
 
Location: Pa
20,300 posts, read 22,150,151 times
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Good maybe this might force our elected reps to act as though we do have a limit to our spending.
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Old 05-03-2009, 09:27 PM
 
1,515 posts, read 3,319,815 times
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Quote:
Originally Posted by tinman01 View Post
Good maybe this might force our elected reps to act as though we do have a limit to our spending.
A novel idea huh?
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Old 05-03-2009, 11:25 PM
 
12,669 posts, read 20,391,560 times
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Obama will just continue because he is right and everyone else is wrong.
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Old 05-03-2009, 11:27 PM
 
154 posts, read 153,364 times
Reputation: 52
Ban Chinese imports (i.e. don't shop at WalMart!).
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Old 05-03-2009, 11:52 PM
 
654 posts, read 464,064 times
Reputation: 159
Quote:
China has also floated replacing the dollar as the key international currency with a basket of units bringing in the euro, sterling and yen.
You can't blame them. China has lost billions, if not trillions investing into the dollar. Its the first step in rejecting the dollar. If we ever lose the edge of having the dollar being a sound investment and global currency, then that would only exacerbate our economic problems. And the scary thing is that people in Washington seem oblivious to this potential problem:

Quote:
"I'm not sure too many people on Capitol Hill realize that this is now happening," he said.
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Old 05-03-2009, 11:53 PM
 
Location: toronto, Canada
773 posts, read 1,212,457 times
Reputation: 283
"China revealed on Friday that it had secretly raised its gold reserves by three-quarters since 2003, increasing its holdings to 1,054 tonnes - or a pot worth about US$30.9-billion - and confirming years of speculation it had been buying."
China admits to building up stockpile of gold

In simple terms, China has been taking precautions against hyperinflation, based on its expectations of the U.S dollar collapse. China is very aware that Americans will still buy Chinese goods so long as they can keep them more competitive in price. The Chinese plan to make sure that their goods remain cheaper than the price of the domestic alternative. However the big caveat is they are aware that so long as the Obama administration continues to focus spending on domestic stimulus, thereby increasing the dollar supply without any benefits heading to China, they are better off hedging against the hit on treasuries that this will cause.
My personal take is unless the rates on treasury bill double within the next six months, they are a useless long term investment. Better to take your investment money to the markets in Shanghai, and Oceania(New Zealand, Australia). Stick with agriculture and energy stocks, and when in Beijing, do as the Beijingese do, buy gold!
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Old 05-03-2009, 11:55 PM
 
Location: Northglenn, Colorado
3,689 posts, read 10,388,954 times
Reputation: 971
Quote:
Originally Posted by JoeMama2009 View Post
Ban Chinese imports (i.e. don't shop at WalMart!).
if you lent someone you know 5,000, and they instantly went out and gambled it away and then came back asking for 5,000 more would you do it? They are in there very right to stop giving money to people who spend it unwisely. Maybe our government should be looking at themselves now and try to actually cut spending instead of increasing it like a drunken sailor in a brothel.
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Old 05-03-2009, 11:55 PM
 
Location: southern california
61,289 posts, read 87,129,640 times
Reputation: 55550
my gosh somebody gota do it. DC sure is not the one. american taxpayer neither, you think he is guna stand up to the mama running up and down the mall with those cards, ha ha ha.
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