China Now Largest Holder Of US Treasuries

The next time Congress wants to raise a $700 billion bailout fund or put together a new package to help a firm like AIG (AIG), Washington is going to have to call Beijing.

As the budget deficit grows each year and is likely to expand at a more rapid rate during a recession as receipts fall and the need for a social safety net rises, the Treasury is going to have to get deeper and deeper into the money printing business.

According to Bloomberg, "China surpassed Japan in September to become the biggest foreign holder of U.S. Treasuries, as foreign investors sought the relative safety of government debt as stocks plunged 9.1 percent that month." China's ownership position is now about $600 billion.

Read the whole story here.

Comments

[dolphy]

They're f***** just like us or shall we say for trusting wall streeters.

[Sundialsvc4]

I never dreamed that the Chinese, that ancient people, would have acquired SUCH a fondness for worthless securities ...

Betcha they haven't.

As my economy teacher put it, "you can't eat paper, and you can't eat gold."

Or, "there are too-many people trading in hog-belly futures, and not enough people feeding hogs."

You wanna fix this thing? Find out who has the key to the padlock to the shuttered factory in YOUR little town. Go inside and try to remember what they used to make there. Inventory the plant and equipment that's still probably in there, and identify what it would take to bring it up to modern standards. You're going to have to BUY that equipment, so what factory across-town used to MAKE that equipment?

Re-build ... re-start ... what used to be a formidable DOMESTIC competition to anyone in any other country who wanted to do business here. You're all welcome to do business here but you're going to have to compete with us. You can't just compete on "we sell for less" because, with the WAGES we're all earning here, we can afford to be picky.

Interest rates? Six percent on a loan, and it's tough to get one. (You have to, you know, pay it back.)

REAL industriousness produces REAL goods, REAL close to home, and so it produces the wages to buy them.

Right now, the Chinese are holding a great big bag. "Nobody is stupid-man here. Nobody."

[KillTheMessenger]

I can smell fear. And that, my friend, is a good thing. The Chinese are not just coming, they are here.

:-)

[DontJustFollow]

Why are THEY smiling? Imagine they'd be smiling if we told them their paper is worth as much as all the mortgages DODD and FRANK approved at Fannie & Freddie ? -- Baa HAHAHAHAHA no more big times at the Panda Express Comrad !!!

[sposton]

We send them our factories, we buy their junk, they accumulate dollars a big portion of which they'd recycle to purchase our assets and Treasury bills and this would go on forever like Eveready bunny. The battery is running out of juice and we have no more factories and no more money. Brilliant!

[Sundialsvc4]

If I attach a thin wire to the poles of a car-battery (removed from the car...), I can marvel at this great new source of heat and power that I have just discovered ...

If I am a banker, I can speculate as to how many other people in this world would love to buy this new discovery if only they knew about it. Without actually bothering to count them, I sell securities based on this speculation. With the money I build a nice big house with a warm fireplace, and I surround it with a tall fence and hire some guards with bad dogs.

If I am a corrupt "civil officer" of this Government, secure in the notion that "impeachment is off the table just because Nancy said so," then I am going to pass whatever proclamations or laws as may be necessary to help sell more car-battery-power double-derivative futures. My big house will be a yacht.

This is not a "financial crisis." This is H-I-G-H C-R-I-M-E.

And you know... if I were a Chinese businessman, or an Indian businessman, or even an American businessman ... I would know that I am being intentionally swindled by a Government. I have not only a family to provide for, but a desire "not just to live but to live well." My memory is long. My intelligence is large.

[sposton]

High crimes indeed! Have you noticed there is no criminal investigation, no commission, no nothing? The Congress isn't really asking much, either. And the same people who were in charge before are in charge now.

I think our country is in deeper trouble than anyone is willing to admit. The causes for this meltdown cannot be limited to the financial world's greed. The root cause of this trouble is the globalist ideology that is responsible for the wholesale deindustrialization of our country and unsustainable trade imbalance which were "fixed" with creative financial capitalism. Where did the benefits of globalization go? To the same criminals that we are supposed to be bailing out now. Globalization and financial meltdown are not separate - they are one and the same.

[Samalabear]

The anxiety surrounding Obama's election was bad enough Here we go again. How do we get through these last two months of Bush and Co.?

[Sundialsvc4]

I-M-P-E-A-C-H T-H-E-M.

Huh? In mid-November? Yeah. Introduce the bill in the house at 8:00, sign it in the Senate by 10:00, arrest the guys by High Noon.

What? Congress has left town? Call 'em back. Surround their houses and carry them on your shoulders, passing them from hand-to-hand in a continuous line of angry people stretching all the way from Sacramento to the Beltway, until they either "get the message" or discover they can cast their votes by phone.

You wanna stop living with High Crime? Then, "stop High Crime." It can be done.

[deminmo]

Doesn't it make you feel warm and fuzzy in this holiday
season, to know that a Dictatorship has controlling
interest in our country? A "takeover" without firing a
shot.

[sposton]

"The Capitalists will sell us the rope with which we will hang them." --Lenin

[leftLibertarian]

bush - the real manchurian candidate - is a commie proxy.

[NationalTreasure]

the shareholders who benefited the most from the bailout have been the Saudis and the Chinese

the bailout has gone to cover their investments more so than to benefit folks on Main Street

this bailout was the worst decision of ever -- the government could have directly taken over every outstanding residential mortgage and every residential foreclosed property in the country for less than 70 billion dollars if this was only about mortgages; but it was not this bail out is nothing more than covering the largest Ponzi scheme ever perpetuated

[DontJustFollow]

Now you know why REID and PELOSI were all smiles when they passed "their" rescue of the American way of life . . . Is anyone out there going to tell them what they've done?

[vippy]

Oh please, don't blame it on them, they did not vote themselves into office!

[Sundialsvc4]

(Shrug) The guy who's really smiling here is a leprechaun.

[Erdgeist]

I just love the GOP, they are Communists at heart waving their ChiCom made America flags. Their strategy -- even going back to old Dick Nixon -- has been offshore to the ChiComs. Send them our technology and factories. And make dang sure you throw Americans out of good jobs, while giving them a credit card. Then tell them they can bus tables, become janitors, or flip hamburgers.

Will it ever dawn on the hare brains who inhabit Washington D.C. that an import tariff on all imported goods might be a nice way to get rid of our National Debt while at the same time creating some REAL jobs in America called "manufacturing"? (Golly, imagine making our own American flags for a change!) I mean wouldn't it be nice to actually make something tangible instead of making financial bubbles?

[courageunderfire]

Every single company that George W. Bush had, he ran it into the ground!
I knew that when he was elected that it would be bad, but I never dreamed it would be THIS BAD!
He should have been impeached! Now we have to scrape ourselves off the unpaved road and
get back to business of getting our country in the game again.
It will be a journey like the climb of Mt. Everest, and I believe that we can get to the summit, and when we do, let us hope that we have learned from the past 8 years of mistakes and make a new frontier.

[deminmo]

We not only got sold up the river, we got sold to the
highest bidder. Bush still has, what 62 days left in
office....can't wait to see what happens next!

[vippy]

I switched parties in 2001 when I saw what Bush was doing. I knew the numbers of unemployment were fictitious and made no sense. I saw how they corrected their monthly
CPI and GDP AFTER THE FACT. Yes, and I am sure I was not the only one. As usual, the
people don't pay attention to what their government is doing and I remember they asking
why people let Hitler become so powerful LOL, and that was how many years ago????

[Budokan]

Good job, GOP! And kudos to all the slackjawed CSs who voted for Bush in 2000 and 2004.

[nibblybits]

When Reagan entered office, we were a net creditor of the world. W doubled our national debt.

Whoever believes Repubs are for fiscal responsibility and small government are half-wits.

[tomas0808]

It's called Flood Up economics. The only people who have better lives the last forty years are the super rich.

I want revenge

[PhilipTaylor]

China has a Billion More people to build their growing economy and they Export Manufactured GOODS!

America can not compete on price so we had better compete with NEW QUALITY GOODS and SERVICES. We built the PC Revolution and now we need to build the Energy Revolution! We tried exporting Manufactured Financial Paper and that FAILED because it was not a REAL and HONEST set of Products. Now we must become even MORE INNOVATIVE to overcome that Bush Era export base!

Energy Products Manufacturing and Technical Services are two areas we can lead and we must build these sectors.

[darthdarcy]

Or we just never pay them or equalize the deficit with them, which is the plan...

[darthdarcy]

Suckers...!

Hahahahahaaaa...Losers..!

[harriettubman]

I guess China is RICH since they make our auto parts, toys, medication, clothes, building materials, some food, pet food, and so much more I can't name. Why does China still have slums?

[Takae]

That question doesn't make sense. Every wealthy or developed country has its share of slums. Even the US.

[tomas0808]

Yeah, but they're pretty rare in countries like Norway. Now those people know how to run a country. Free health care, education. They get the heck taxed out of them but no one complains because they get what a gov't is supposed to give its citizens, safety and security. Everyone does 2 yrs national service because they know their gov't isn't gonna send them off to die just to sell more helicopters. We need to take a clue from them, on the left, or Belgium on the right. The aging method of American gov't is obsolete. It doesn't mean we have to throw out the constitution, just be open to other ways of doing things

[KillTheMessenger]

China is far from rich. But they are becoming wealthier by the minute. Of course, they are working hard for it while Americans just keep complaining on the internet.

[deminmo]

There are lot's of extreemly poor people in China. The ones
you see work in government jobs and at least appear to
support the Dictator. Garment workers in China are beginning
to lose jobs because now there is competition from other
countries offering labor for $.86 an hour. Our country is losing
high paying union labor because companies want less cost,
more profit, and buyers want cheap product. If it weren't for the
internet, we might all be working for $ .86 an hour!

[strangerinthenight]

China's geography is huge. There are still provinces that has not been touched by the recent economic boom. The culture is vast, and subdivided into 23 provinces and further subdivided into hundreds of cultures, each distinct and unique. The wave of change is rapid, still, with that vast geography, huge populations, and other political, social and cultural reasons, some of the provinces has yet to see progress.

I saw that first hand on my last year in college, where I opted to international studies and interned there for 2 semester. I heard that old adage before - China is a Sleeping Giant . When it wakes up ................. watch out ! That's probably true, based on what is going on lately.

Slowly, China and its citizen is getting use to progress. China's population is about 1.3 billion, about 20% of the worlds pop of about 6.7 billion. Hold it - i need to get that abacus, ancient Chinese calculator, a gift from my room mate in college.

Lets see if i can remember to use this. 20% of 6.7 billion = 1,330.044,605 ? or somewhere in there. That means 1 of 5 people in this planet resides in China. That kind of change will take time.

One thing I can say about my college roommate - her mind is razor sharp. Typical Chinese student. And no, I can't compete with her. Watch out USA - you have a competition. A GIANT ONE.