He's worried? Why aren't Americans worried? We're the ones stuck paying the bill !!!
Most of us know we can't pay it, but we keep up the charade anyhow for appearances sake. The Obama Administration touts fiscal responsibility while increasing the Federal Debt four-fold over its predecessor ($500Billion to $2TRILLION) in less than 90 days in office!!!
YHVH's patience with us is far beyond mine. But the inevitable will come. Why?
Because the fundamentals are still broken and ignored across America. Sin is still increasing and rampant from sea to shining sea. Home, schools, businesses and governments are ever in chaos. Until America has a change of heart & mind towards GOD in Yashua, and against her wicked ways, there will be no peace in our land.
Our failing fiscal health is but one significant aspect of our overall condition. Our social ills of crime, drugs, adultery, divorce, pedophelia, and the like, are also out of control. America's priorities are not Godliness & righteousness to be the bulwark for Christ to the world. No wonder the Islamic fundamentalists hate us so,... we're bigger hypocrites than they are. And, they cannot stand to be outdone, they'll kill us mercilessly to prove they're right. But, oh, we're only worried about our economy right now...
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China’s Leader Says He Is ‘Worried’ Over U.S. Treasuries
Speaking ahead of a meeting of finance ministers and bankers this weekend near London to lay the groundwork for next month’s Group of 20 summit meeting of the nations with the 20 largest economies, Mr. Wen said that he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.
As the financial crisis has unfolded, China has become increasingly vocal about what it perceives as Washington’s mismanagement of the global economy and financial system, joining a chorus of foreign critics of unbridled American capitalism. On Thursday, for example, France and Germany rebuffed American calls to coordinate a global stimulus package at the G-20 meeting, saying financial regulation should come first.
In January, Mr. Wen gave a speech criticizing what he called an “unsustainable model of development characterized by prolonged low savings and high consumption.” There was little doubt that he was referring to the United States.
Mr. Wen sounded similar themes in his remarks on Friday, which came in response to questions at a news conference at the end of the Chinese Parliament’s annual session. While refraining from direct criticism of the Obama administration’s economic policies, he reminded Washington of China’s status as its largest creditor. With budget deficits mounting rapidly, the United States needs China if it is to finance all that new debt at low interest rates.
“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”
He called on the United States to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.” What he did not mention was that Chinese investments in the United States helped drive the debt-fueled boom of the last decade, during which China grew increasingly dependent on the American market — a point that was driven home earlier this week when China reported a record 26 percent drop in exports in February.
He stopped short of any threat to reduce purchases of American bonds, much less sell any of them, underscoring the two countries’ mutual dependency.
Some specialists say that China’s investment in American debt is now so vast that it would be impossible for Beijing to unload its Treasury securities without flooding the market and driving down their price.
Still, it is rare for any world leader to raise questions about the safety of United States Treasuries. Both the White House and Treasury Department issued reassuring statements. Robert Gibbs, the White House press secretary, said, “There’s no safer investment in the world than in the United States.” Foreign investors would be reassured if Congress adopted the president’s budget plan, he said, because it would put “us on that path to fiscal responsibility.”
While economists dismiss the possibility of the United States defaulting on its obligations, they say China could face steep losses in the event of a sharp rise in United States interest rates or a plunge in the value of the dollar.
Mr. Wen praised China’s comparatively healthy economy and said his government would take whatever steps were needed to end the country’s slump. He also predicted that the world economy would improve in 2010.
His remarks appeared to have little immediate effect on financial markets. Many China experts said Mr. Wen appeared to be speaking as much to a domestic audience as to the United States. Other analysts interpreted Mr. Wen’s comments simply as a sign of irritation that the Obama administration had paid little attention to China in the planning for the G-20 conference. At the last such meeting in November, China’s president, Hu Jintao, spoke about the importance of listening to the voices of major developing economies in reforming the international financial system.
“The Chinese are peeved, legitimately, that the Americans have ignored them in the run-up to the G-20,” said Adam S. Posen, the deputy director of the Peterson Institute for International Economics. There may also be a bit of tit-for-tat for Treasury Secretary Timothy F. Geithner’s claim, in written Senate testimony, that China manipulated its currency, keeping it artificially low against the dollar.
Mr. Wen’s confident performance also underscored the growing financial and geopolitical importance of China, one of the few countries to retain enormous spending power despite slowing growth. It has the world’s largest reserves of foreign exchange, estimated at $2 trillion, the product of years of double-digit growth.
Economists say at least half of that money has been invested in United States Treasury notes and other government-backed debt, mostly bonds issued by the Treasury and government-sponsored enterprises, Fannie Mae and Freddie Mac.
Much of the Treasury debt China purchased in recent years carries a low interest rate and would plunge in value if interest rates were to rise sharply in the United States. Some financial experts have warned that measures taken to combat the financial crisis — running large budget deficits and expanding the money supply — may eventually lead to higher interest rates.
“The United States government is going to have to sell a huge amount of paper, and the market may react by demanding a higher interest rate,” said Nicholas R. Lardy, an expert in the Chinese economy at the Peterson Institute for International Economics. “This will force down the price of outstanding treasuries, imposing large paper losses on the Chinese.”
The conflicting financial currents pose a dilemma for Beijing. The smaller the United States stimulus, the less its borrowing, which could help prevent interest rates from rising. But less government spending in the United States could also mean a slower recovery for the American economy and reduced American demand for Chinese goods.
The sharp narrowing of China’s trade surplus with the United States may result in reduced Chinese purchases of American bonds in any case. By some accounts, China’s trade surplus could fall by as much as half this year, to around $155 billion. That would leave China with fewer dollars to buy foreign bonds, particularly as the pace of investment flows into China has also slowed sharply.
During her visit here last month, Secretary of State Hillary Rodham Clinton publicly assured China that its American holdings remained a reliable investment. But the sheer size of China’s holdings of American debt ensure that the countries’ partnership will endure, some analysts say. “The only possibility, really, is that China will have to hold these bonds until maturity,” said Shen Minggao, the chief economist at Caijing, a Beijing-based business magazine. “If you start to sell those bonds, the market may collapse.”
