China Losing Its Taste For US Debt

New York Times:

China has bought more than $1 trillion of American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home, a move that could have painful effects for American borrowers.

The declining Chinese appetite for United States debt, apparent in a series of hints from Chinese policy makers over the last two weeks, with official statistics due for release in the next few days, comes at an inconvenient time.

Read the whole story: New York Times

Comments

[SangZe]

I, too, have lost my taste for U.S. debt. Hopefully the man I voted for as president does, too, and will act on the problem.

[victorsays]

America need to sell technology to China to balance the deficient. Stop lecturing the Chinese people and trying to force Americanization of their economy and create a peaceful environment.

[Big0725]

Maybe.....­..........­...we start losing our taste for Chinese imports, and if the Chinese don't want to lend us money, maybe we start placing tariffs on Chinese imports to make up the shortfall.

Betcha they won't be able to dump their crap over in the EU.

[therealredstateblues]

That is an excellent idea . in fact prior to WWI and the beginnings of the income tax, the US got most of its revenue from Tariffs

All other industril countries have VATS and tariffs except the US

Unilateral free trade is clearly not working, and all one has to do is look at the trade deficit for proof of that

[therealredstateblues]

We should be implementing 100% inspection of all imported goods and charge fees to importers for doing so as well

[drymartini1]

thats cuz we are paying way too low interest rates on our treasuries.

its time to UP the INTEREST RATE on our treasury. get the chinese and arabs salivating again. and that way we can pay for our expenses (we sure can afford them).

Chinese dont want to buy our debt at current rates. we need to up the rates.

[barakagirl]

it has always baffled me how Republicans revere their total free market ideology and how they hate Cuba but find it reasonable to borrow massively from Communist China....

[odan]

Yes, but wasn't it Clinton who granted permanent normal trade status to China, and isn't that part of the problem? It's not just a repub thing with China, this has been building ever since PNRT was granted.

[metropixie]

You're confusing two arguments. Normal trade status normalized the relationships between two countries that were really not each other's enemies. If China had not bought US debt the US may have faced an economic decline much sooner under Bush's wasteful spending on unnecessary foreign "wars" (police-actions rather). The interesting thing about the Republicans is that in the end they converted capitalism to socialism by taking the people's money and giving it to suddenly-n­o-longer-w­ealthy corporations albeit without nationalizing them. It makes America almost look like Chavez's Venezuela these days. Obama has a gargantuan task at hand making sense of this mess again in a way that not only helps the local economy but also the economies around the world.

[SammyD]

this story should be the headline It shows that most Americans and even the "journalists" don't understand what this means to America

[ajax2]

GW Bush has destroyed the U.S. dollar as the world standard. However, no other currencies have stepped forward, which may give Obama time to repair its image and power.

[kilbilly]

Now what's wrong with "they buy our junk, we buy theirs?"

[imusintheevening]

The Chinese sense that it is time to stop investing in the Ponzi Scheme of the US Government.

[olephart]

Not buy our debt? We've been living on debt for the last 8 years. Bush has run up 5 trillion in new debt. We've got Wars, CIA black ops, defense spending, Homeland Security, privatizations of Governmental services, rebuilding contracts for Iraq and bribes for Sunni militants to pay for. Who's going to pay for Israel's invasion of Gaza, weapons for Pakistan and Egypt, support for Georgia and all our Foreign Aid boondoggles? We've got bridges to nowhere, FEMA trailers rotting in fields and weapons systems that the military doesn't even want on our books. There are banks, insurance companies, Wall Street firms, credit lenders like GMAC and big companies to bailout. Don't forget the over extended homeowners, speculators, liar loan holders and home builders on those bailouts. Our States are broke too and we've got to bail them out.

Going forward we've got to halt falling employment and create 3 million jobs. Never mind that for the last 10 years we've been exporting our jobs to slave wage countries like China and allowing 12 million to enter illegally to work. We have to stimulate our economy now that we can't sell our houses to one another and take the "equity" out to spend. Our wages have not kept up and we have had a zero savings rate. We've got infrastructure, electrical grids, energy programs, unemployment insurance extensions and job training programs to fund. There is only one way to pay for all of this, Tax Cuts!

[barakagirl]

tax cuts the only way? you're joking right?

[therealredstateblues]

He is being facetious

Obama is proposing more tax cuts, which nobel laureate krugman and others think is a bad idea when the deficits are soaring

[imusintheevening]

Colbert, is that you?!

[sonoffestus]

I am amazed it only took us this long to figure out you can't run an economy on debt. Greed is good , debt is good......­......LOL!

[Ridgemore]

Looks like China has the same problem the US bankers and mortgage lenders have. The bankers gave loans to people to buy things they couldn't afford or didn't need to the point of market saturation. This ened up in loans that cannot be repaid and debt that cannot be resold. China loaned the US money to buy its goods to the point of bankruptcy of the American consumers and now the US cannot repay the loans from China and China has no where to sell the debt. If the Chinese government had the welfare of its own people at heart they would have invested the trade surplus in improving lives of its workers and China would now be in the catbird seat. Most of their workers are still in poverty and the government is stuck with debt that cannot be repaid any time soon - Americans get to keep the junk and the Chinese workers are out of luck. The experiment of running large trade deficits has run its course.

[Meesterclean]

Well said.

[melponeme k]

Its bigger than just government debt.

The Corporate Raiders' companies also took loans from China and they in turn dumped that debt on top us.

We, all of us, are now responsible for our personal debt, the government debt and the debt of the Corporate Raiders.

[Meesterclean]

Best case scenario:
China should spend the money it is owed around the world to help get the world economy going again.

Worst case scenario:
What would happen if they decided to use the money owed them to buy up commodities, goods, and staples to corner markets around the world?

[therealredstateblues]

they are suing some of their money to build up their military

[Meesterclean]

That is certainly true, but we should also wonder if this economic policy is w a r by a different name and far more hurtful.

[mytwosense]

One more thing -- now that they've got Michael Phelps, they don't need us anymore.

[cactusgal]

Coincidentally, we're losing our taste for melamine

[naeldwyck]

With a plunging dollar and China pulling out its money, you'll soon have to suck your milk from a cow's udder yourself if you're going to be able to afford it.

[truthforme]

LOL! Okay, the visual I got with that was really funny. To bad there is truth to the statement or I could have laughed longer.