This has to make you nervous, especially since the US is about to dramatically step up its borrowing. Chinese Premier Wen Jiabao says he’s “A little bit worried” about the value of all of his country’s US Treasury holdings. “I would like to call on the United States to honour its words, stay a credible nation and ensure the safety of Chinese assets,” he added.
Hey, if we held $1 trillion in Treasuries we’d be “a little bit worried,” as well.
The smart money says that no matter what, China has to continue to fund our debt and that they really don’t have much choice. That this is the economic equivalent of mutually assured destruction. And yet Hillary had to spend a trip to China basically being a bond salesman, last month.
Also, China, can we talk abount contaminated toys and freedom in Tibet? Oh, wait probably not since we owe you so much money.