“China elected to peg the Yuan to our Dollar 15 years ago with the desired effect of keeping it unrealistically low. The cheap Yuan complelled US corporates to manufacture products in China. US unemployment rose as factory jobs vanished. Since China doesn’t import US goods, it instead purchased our Treasury issues, a staggering $1.160Trillion in US debt. China helped drive down our interest rates. So, we discovered that we could keep our “fat cat” lifestyles through borrowing. We outspent our incomes by continually refinancing our homes, while its values kept rising. This refinancing credit scheme kept our spending rates high. The approach worked well, as long as China continued to buy F-Mae, F-Mac, Treasury issues. Now that our debt rating has been lowered, it's becoming too risky to own US debt. Though they gradually shifted to longer term bonds and purchased more Treasuries this month, they recognize the need to divest US “holdings” longer term. If China does so aggressively, we'll will feel a tougher economic down cycle, possibly a financial collapse. China and the US have, in essence created a huge liquidity bubble, and increasing our debt ceiling made it worse. The prudent approach would have China opening their markets, allowing the Yuan to float on the open market, and the US would need to significantly lower its deficit spending. Paying off the piles of debt should start the process of US economic recovery and a return to a more robust, growth-oriented economy.
“Let us not forget that UBL was not found in the battlefield but rather as a result of our focused intelligence work. Similar tactics, along with specialized small forces will target the remaining terrorists, without the need for occupation of100,000 troops on the ground. It’s time to leave Afghanistan and Iraq while continuing our efforts to provide advice and training to Afghans and Iraqis as they take responsibility for their own defenses. We’ve lost 1,564 American Warriors along with 11,657 wounded in Afghanistan alone. I'm hopeful that UBL's death will provide us with a well timed exit strategy and ability to unwind our military in both Afghanistan and Iraq, which would save us billions over the next decade--as well as the lives of our Warriors. We have spent some $3 trillion, that’s trillion with a “T”, since 9/11 on these wars. Withdrawal and peace will go a long way in cleaning up and re-balancing our economy and fiscal finances. My thanks to Senator Barbara Boxer for authoring the Redeployment of US Combat forces from Afghanistan Act, along with co-sponsor Senators Kirsten Gillibrand, Sherrod Brown and Dick Durbin.”