GWAR79 said:
China doesnt even own 10% of our debt (US owns over 70% of its own debt). I get so sick of this china to own the US argument. Get the facts straight dude
Sorry GWAR, you might want to read up a bit.
Newsweek, Debt Debate: China's View
Aug 7, 2011 10:00 AM EDT
"Readers who enjoy arithmetic can now answer a further question: what proportion of the federal debt is owed to foreigners? The answer is just less than a third. If you exclude the part of the debt the government owes to itself, the
figure is 46 percent—nearly half. But my Chinese friend didn’t need me to tell him that. Everyone here knows that the United States is in hock to the rest of the world and that China is its No. 1 creditor.
According to official figures, mainland China holds $1.1 trillion in U.S.-government debt instruments. But it’s an open secret that the Chinese authorities also like to buy Treasuries via intermediaries in London, Hong Kong, and elsewhere. Add the U.K. and Hong Kong figures and the total is closer to $1.6 trillion—about 17 percent of the federal debt in public hands. And if you include nongovernmental securities held in China’s international reserves, the U.S. debt to China rises to more than $2 trillion.
The antics of American legislators take on a new significance when you realize how our leading creditor interprets them. As Beijing sees it, the last three months have furnished ample evidence that—regardless of what the American rating agencies may say—the United States is no longer creditworthy. Even if Congress has pulled back from the brink of outright default, many in China view the debt deal as at best a temporary fix. As the Xinhua News Agency put it, the 11th-hour deal has “failed to defuse Washington’s debt bomb for good, only delaying an immediate detonation by making the fuse an inch longer.” Meanwhile, the unspoken intention of the Federal Reserve is to debase the dollar through “quantitative easing,” which translates into Mandarin as “printing money.” (It’s no accident that one of the bestselling economics books in China is called Currency Wars.)
So the Chinese have skin in this game. And their U.S. exposure doesn’t stop there. In order to prevent devaluation of their dollars, they have no option but to keep buying yet more dollar-denominated securities. That strategy suits their exporters fine, since it keeps their goods competitive in the American market. But what if the effect of last week’s debt deal, which mandates deficit reduction of $2.1 trillion over the next 10 years, causes a further slowdown in U.S. growth? Not so good.
China has its own economic problems, to be sure. But they are the problems of a rising power. From Beijing’s standpoint,
America’s problems are plainly those of a power in decline. We didn’t just raise a ceiling last week. In Chinese eyes, we also fell through a floor."
But Lance can turn this all around, he's a pure and honest American legend now! He can champion anything: cycling, cancer, collusion, and even debt.
NW