Ut Oh: China Doesn't Yen For Much More US Debt

Obama just had a face-to-face with the Chinese. No matter how you slice it this is bad and makes him look like a fool. Did he even mention the debt financing issue, or was it just not important enough what with one of his key politcal issues, the climate scam, on his mind? Are his priorites that screwed up? That just might be the case. And if he did bring it up, it's more epic fail. There seems to be a lot of that with this guy running things, or trying to, perhaps. Also might be a leverage play on China's part. At least they seem to know what they're doing.

In a discussion on the global role of the dollar, Zhu told an academic audience that it was inevitable that the dollar would continue to fall in value because Washington continued to issue more Treasuries to finance its deficit spending.

He then addressed where demand for that debt would come from.

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

"The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," he added. "The world does not have so much money to buy more US Treasuries."

Comments

[mark l.]

the forecasted budget deficit for next year is going to be 1.4 trillion, with another deficit of 921 billion for 2011.

http://www.cbo.gov/ftpdocs/105xx/doc10521/08-25-BudgetUpdate.pdf

(page 12)

when all is said and done, we have to come up with about 2.5 trillion of borrowing, for the next two years, 1.2 trillion of our 'need' is new govt spending.

i don't understand how you can drop dollars from the helicopter, if you don't have dollars.

[Drider]

I was thinking what is going through the Chinese minds as the "O" spouts off at them how they have to act on this climate scam and then proceed to tell the rest of the world that we are going to funnel tens of billions of dollars into the ruse annually.
The Chinese have to be shaking their heads and saying, not with our money you won't.

[WAHOO WILLIE]

"i don't understand how you can drop dollars from the helicopter, if you don't have dollars."

Well mark l, we get the dollars from the filthy rich, now down to those who make a whopping 50 grand a year. At least the obiecrats are finally going after the "working poor". You know, adults who work for minimum wage. The free ride is over or soon to be and the dregs of society will themselves be helping to bear the burden. Why with sin taxes, even the homeless will have to fork over more for their wild irish rose and t-bird wine. It's going to be a shiny happy new world my friend.

[mark l.]

"The free ride is over or soon to be and the dregs of society will themselves be helping to bear the burden."

my money will be getting 8 to 9% return in a bank, while these poor schmucks are borrowing it at 12%. Inflation? time to get to seperating the 'haves' from the 'have-nots'.

[WAHOO WILLIE]

Obie and friends are going to have the debt collectors at our door and we will be found wanting. I actually think it's what they want....to completely destroy the economy so we all beg the government...or the Chinese to save us from ourselves. Learn a skill and stash something away for yourself. No sense starting from the bottom in Obie's shiny happy prolitarian world.

[templar knight]

"Learn a skill and stash something away for yourself."

Willie, that is the best advice I've seen lately. Our time is over for a while, whether we can recover is up in the air, perhaps we will plunge into the dustbin of history, but nonetheless it is required that we try. For our kids sake.

[Joseph Brown]

It took this to make D'ohbama look like a fool? Nah, he looked like one a long time ago. Now all the dunces that voted for him can look in the mirror and say, "Dang, I look like a fool."

[southdakotaboy]

First of all we conservatives must declare economic war on Obama and the Democrats. Everything they do depends on us (conservatives) just putting our heads down and ploding along like the draft horses in Animal Farm.

We need to shut down. Stop spending money if you don't have to. Food and fuel and that is it. Period nothing else. Get plenty of cash out of the bank, because you know that is the next place they are going to come looking. Pay for everything in cash. This will help small business owners hide money from the government (starve the beast).

Get to know your friends and what they can do and what you can offer them, keep everything between friends and off the books if money is exchanged.

Next if you run a business get rid of any Democrats, purge you business of them. Manufacture reasons, but make sure you have "proof". The best way to do this is if you have computers that you can assign to them figure out a way to put porn on there. You then have a "violation" of policy and can get rid of them. When you go to replace them don't advertise. Instead what you need to do is contact your local conservative groups and social network with them. This will help out fellow conservatives and hopefully prevent the unions from gaining a foothold in your business.

Avoid doing business with place that have unions or ones that have openly supported the Democrats as much as possible. If those businesses go bankrupt then the union losses a source of income.

It is time we start treating those on the left as the enemies that they are. It will be painful but they are stealing our freedom and future from us and we need to do what ever it takes to stop them.

[Pasadena Phil]

This could be the final nudge that pushes the world banking system over the edge and into "THE Great Depression". If the world stops buying our debt, the dollar carry trade will come to a screeching halt. It never made sense for the world's only reserve currency economy to also be fueling the carry trade. What it amounts to is a strategy to rescue the banks from the world's subprime mortgage by turning every country's sovereign debt into subprime debt. It's all part of the "animal spirits" philosophy where bad news becomes "green shoots" and the worse the greener. Borrowing our way out of debt so we can spend our way out of a spending problem.

Contrary to Tom Friedman, the world isn't flat. It's upside down. What comes after trillion anyway? Does it matter any more?

[TheJane]

Hey Riehl--- did you see this? You got a mention in an AOL piece titled:

Opinionometer: Obama Lovers Scorned -- by John Merline.

In it, you are described as a "liberal blogger." Here's the whole quote:

"How about this one? "The failure is Obama's and no one else's to own, even if he'll try to massage the message, or slink away from it, somehow." That's liberal blogger Dan Riehl." Heh.

They do link to you.

Here's the link:
http://tinyurl.com/AOLPiece

See ya, you Obama lover you. LOL!

[Joseph Brown]

I haven't been around here long but calling Riehl a liberal is like calling Merline Curly.

[Pasadena Phil]

Unclean! Unclean! I've been commenting on a liberal blog!

[Philip McDaniel]

LOL
Good post, southdakota, I especially liked the purging of Democrats from businesses. At the very least a rumor like that would piss them off and strike a bit of fear in them...and at the best, they would be kicked to the curb in droves.

[rhodiola rosea]

Obama should go to China and make a bunch of stirring speeches about hope and cvhange. He sould stress how we're all going to work together and move away from the division of the past. Oh wait, I just realized, they've lived for 50 years under communist propaganda and are completely immune to BS.

[CalFisch]

Does anyone know why our most secret missile defence systems where taken away form congress (oversight) and a new Dept. set up with the white house now has control of them. Didnt we see this before with the clintons and Sandy "ham"burgler, and leaked docs to china? Would anyone put it by these scum dems & pres to sell off some debt. or to buy more debt with some our secrets?
These people do not care about America,just their screwed up agenda to ruin this country.

[CalFisch]

Oh and lets see how china wants to deal with the tainted drywall they shipped to the US and is now in tens of thousands of houses in Florida, Mississippi and Louisiana,,,,, TOXIC
Last month they told our commerce dept to go pound sand, ..."we own too much of your debt..." . Let see if they change their minds, and if they do WHY?

This group of immoral scumbags in Washington are tearing down this country from the inside out.