China has 'canceled US credit card'

http://news.yahoo.com/s/afp/20090430/pl_afp/financeeconomyuschinabonds;_ylt=A0oGktkCIf5JwoIAMgODBqMX;_ylu=X3oDMTBwMjNqdWVsBHBndANhdHdfd2ViX3Jlc3VsdARzZWMDc3I-

Thu Apr 30, 6:11 pm ET

WASHINGTON (AFP) – China, wary of the troubled US economy, has already "canceled America's credit card" by cutting down purchases of debt, a US congressman said Thursday.

China has the world's largest foreign reserves, believed to be mostly in dollars, along with around 800 billion dollars in US Treasury bonds, more than any other country.

But Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February.

Representative Mark Kirk, a member of the House Appropriations Committee and co-chair of a group of lawmakers promoting relations with Beijing, said China had "very legitimate" concerns about its investments.

"It would appear, quietly and with deference and politeness, that China has canceled America's credit card," Kirk told the Committee of 100, a Chinese-American group.

"I'm not sure too many people on Capitol Hill realize that this is now happening," he said.

The Republican lawmaker said that China was justified in concerns about returns from finance giants Fannie Mae and Freddie Mac, which were bailed out by the US government due to the financial crisis.

Kirk said he was the first member of Congress to tour the Bureau of Public Debt, which trades bonds, and was alarmed at how much debt was being bought by the US Federal Reserve due to absence of foreign investors.

"There will come a time where the lack of Chinese participation may have a significant impact," Kirk said.

"We should track that, because up until last month they were the number one provider of currency to the United States and now they're gone."

With China's economy also hit by the global economic crisis, Premier Wen Jiabao has openly voiced concern about the status of his country's investments in the United States.

China has also floated replacing the dollar as the key international currency with a basket of units bringing in the euro, sterling and yen.

why am I not surprised. The next phase in this dying economy: credit card crisis. It's only a matter of time.

When the number of potential buyers of bonds drops, the interest rate has to go up to entice more buyers. National debt interest payments are about to explode. No county has ever survived who outspent its treasury.

The basket China refers to was discussed during the G20 Summit. At the same time Obama and Europe nullified the Bill of Rights, Europe was given authority to manage US finances. We have 1 vote while Europe has 6.
If memory serves me, there are to be three baskets. Asian nations, Western/European nations and Latin nations.

Communist pigs! How dare they!

You got it.



I wonder how many people are still ( or already?) living off credit cards, loosing the job or lower wages....or just not paying them? I just think there is a bubble growing there..ready to explode..
Note how Obama a few days ago were talking about the credit card act thing, which would stop the credit cards to raise interest rates sharply without notice. While many say "yeah that's so great" I'm looking at the other side of the card, and that says, they are panicking?

And by the way, how could anyone lend money or just commerce when you got a terrible debt? There is no guarantee anymore for repayment? USA doesn't have a "down payment" or cover...like let's say Iran, with massive oil reserves under ground, or India, where many of the outsourced work from USA ended up. USA was a "debtor" but things have changed...cut the lines at china and the ragdoll falls on the ground.

First, who screwed the board? Was it you, willing2?



US has been doing just that for almost a century. While I agree with you in theory, it would be nice to know the limits of tolerance.