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Get your fiscal house in order: China warns US as Asia's expresses concern for $1.3tn of investments

kelnchp
kelnchp
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Get your fiscal house in order: China warns US as Asia's expresses concern for $1.3tn of investments - Page 2 Empty Get your fiscal house in order: China warns US as Asia's expresses concern for $1.3tn of investments

Post by kelnchp on Tue 08 Oct 2013, 9:36 am

First topic message reminder :

China, the biggest foreign creditor of the United States, has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay.

The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking” and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.

“We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,”  Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,” he added.

The American government entered its seventh day of shutdown on Monday, following the failure of Congress to approve the national budget a week ago. And there was little sign of progress on the still more crucial issue of the fast-approaching “debt ceiling”  deadline. Yet rather than indicating  a willingness to negotiate, the Republican Speaker of the House of Representatives, John Boehner, stated on Sunday that it was “time for us to stand and fight” over the budget. He added that a default was “the path we’re on”. American stock markets opened down in response to the belligerent comments yesterday, with the S&P 500 Index of leading shares shedding 0.5 per cent.

In September 2008 China eclipsed Japan to become the biggest single foreign creditor of the US federal government. The US administration estimates that the China government holds at least $1.3 trillion of its bonds. The total could be higher because Beijing is known to hold American debt through intermediaries. And, in total, the Beijing authorities have $3.5trn of dollar-denominated assets, which would also be hit hard in the event of a default.

These vast foreign exchange holdings are a by-product of China’s closed financial system and persistent current account surplus, which means that most foreign currency that enters the country accumulates with the central bank. The central bank then invests the money in normally “safe” dollar assets. The vast dollar reserves are also a legacy of China’s policy in recent decades of artificially holding down the value of its currency, the renminbi, in order to boost the overseas sales of its politically influential export industry.

Chinese Vice Foreign Minister Zhu Guangyao has waded into the US budget crisis Chinese Vice Foreign Minister Zhu Guangyao has waded into the US budget crisis However, economists have criticised the popular idea that China could exert political or economic leverage over Washington by threatening to sell its dollar investments, since such a drastic shift would ultimately serve to undermine the paper value of Beijing’s own vast investment portfolio. Nevertheless, China’s creditor position and its status as the world’s second largest economy gives its voice some authority in Washington and Mr Zhu made it clear that private representations had already been made. “The US is clearly aware of China’s concerns about the financial stalemate and China’s request for the US to ensure the safety of Chinese investments,” he said yesterday.

Since the global financial crisis, which led to a sharp depreciation in the value of the dollar against the renminbi, the authorities in Beijing have been concerned about the fact that so much of their national reserves are held in the form of the American currency. China has been promoting the idea of a new reserve currency to replace the greenback, with some analysts suggesting that the renminbi could one day take its place.

Mr Zhu stressed that it was vital, not only for China but the wider global economy, for America to resolve its budget impasse. “Safeguarding the debt is of vital importance to the economy of the US and the world,” he said. Referring to a similar deadlock in 2011, which led to a downgrade of the US AAA credit rating by the Standard & Poor’s agency, Mr Zhu said: “We hope the United States fully understands the lessons of history.”

The concerns over the stability of the dollar come at a time of geo-political flux. Barack Obama has sought to “pivot” his foreign policy to Asia to counter China’s growing military influence. But the shutdown has forced the US President to cancel his visit to Asia this week to attend a summit.

http://www.independent.co.uk/news/world/americas/get-your-fiscal-house-in-order-china-warns-us-as-asias-expresses-concern-for-13tn-of-investments-8864935.html
Proven
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Post by Proven on Tue 08 Oct 2013, 9:58 pm

@Neno wrote:So, you are one of those that believes China will use those dollars to get dinars, then oil certificates for cheap oil deals made? Most likely as Iraq will never have to use their reserves to get the dinar back but I like the fact how many things are coming into play as in a way to get China away from the currency manipulation by bailing out of paying the US debt. Had a work related friend today give me his opinion on this (non dinar related), that China is probably pissed and said that they have a good and huge Military..... ;)

We shall see... ;)
Back in 2010, Hillary & Biden traveled to China and it was said a trade agreement was made, but no public disclosure was made.  The Chinese are not stupid.  I can only speculate that the change in exchange rates around the world have already been agreed to.   Remember, 80 percent of all Iraqi oil goes to China....And the US fought the war for what gain?  To make this simple for people, the US sold Iraq to satisfy to Chinese expansion and debt we owe. 

Everything you are reading is just posturing for public opinion....even this article.   Poor Chinese will loose value if the dollar devalues.  This does not disclose the fact that they gained all the Iraqi oil paid by American blood.   I can only speculate the price they paid the US.   Maybe allowing the dollar to devalue. 

I suppose some would call this conspiracy theory stuff, but I call the natural probable sequence of events.   
History is full of examples,  such as the Louisiana purchase.  Napoleon sold the Louisiana territory to satisfy his war debt.  In the case of the US, we sold Iraq to satisfy our consumption of Chinese products.    
 

I have to add that I believe in a literal interpretation of the bible that Babylon will rise.   For this to happen, Iraq must gain economic power.  This is the plan.  It doesn't matter whether people believe or not, it will happen.   Jesus is coming, and biblical prophesy must come to pass.  Even Obama has a part to play whiether he knows it or not, it doesn't matter.  It will happen according to God's word.  

Thanks for the question. 

 
wayoutnow
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Post by wayoutnow on Tue 08 Oct 2013, 10:10 pm

Good post !!!! IMHO there r bigger players in this investiment $$$
Neno
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Post by Neno on Wed 09 Oct 2013, 7:38 pm

I have to add that I believe in a literal interpretation of the bible that Babylon will rise.   For this to happen, Iraq must gain economic power.  This is the plan.  It doesn't matter whether people believe or not, it will happen.   Jesus is coming, and biblical prophesy must come to pass.  Even Obama has a part to play whiether he knows it or not, it doesn't matter.  It will happen according to God's word.    Thanks for the question.
Just asking but doesn't that mean Spiritual Babylon?
Proven
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Post by Proven on Wed 09 Oct 2013, 8:44 pm

@Neno wrote:Just asking but doesn't that mean Spiritual Babylon?
Babylon is the city in Iraq that will become an economic power right before Christ returns.
Screwball
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Post by Screwball on Thu 10 Oct 2013, 5:49 am

@Neno wrote:Interesting isn't it?
Has to happen and dinar sitting in cbi's around the world will be part of the plan!

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