If China Stops Lending Money To U.S.A., Watch Out!

If China Stops Lending Us Money, Look Out

While America is still frozen under the "excess of fear", top economists are talking up the thaw and how it may be just over the horizon.

But what are they really wanting us to set our hopes on? More borrowing fueled by free flowing credit?

What will happen to our economy if the credit freeze thaws, and then China makes a move to stop buying our debt?

But China could reduce or halt future purchases. A less ravenous appetite for Treasurys is already evident: a New York Times article in January was titled: "China Losing Taste for Debt From U.S." One reason for fewer purchases would be diversification. Another would be to divert money toward its own 4 trillion yuan ($586 billion) stimulus package.
Reduced demand for Treasurys would drive up U.S. interest rates, probably pushing down home prices even more than they've already fallen, and also could start a run on the dollar.

Most of us would like to see a light at the end of the tunnel...
But you know the old joke...the light at the end of the tunnel is a freight train!

Peter Schiff in the video just added on March 12, 2009 shown below talks up buying gold and silver, and cheap stocks....take a look!

If your boss slashes your pay, if you have no savings because you spent more than you earned for many years, and if your creditors are threatening to cut off your credit cards and home equity loan, what happens?
The answer, of course, is that you're in serious trouble. And this could be the situation for the U.S. government -- which is facing lower income tax receipts and ballooning deficits -- if China loses its appetite for extending more and more loans by buying U.S. Treasury securities.
China is the single largest foreign holder of U.S. Treasurys. The money it lends to the Feds finances our significant budget deficits.

www.cbsnews.com...

Here is Peter Schiff's take on a possible Scenario involving China, U.S. debt and credit card debt

Lastly, savings can always be relied upon whereas credit is ephemeral. Remarks this week from the Chinese premier Wen Jiabao should serve notice to all Americans that the day will soon come when the Chinese stop lending us their umbrellas. When that happens, the average American will be soaked to the bone.

www.europac.net...

Video on What if China Stops Buying U.S. Debt



We can not recreate the bubble! Here is a short video with Ron Paul confronting Ben Bernanke with the falsehoods of fixing the system failure with credit availability.



[edit on 15-3-2009 by burntheships]

I wouln't really worry about China not buying up US treasurie bills in the near future. There's a simple reason. The more money we owe them, the more power they hold over us.

We've hovered over the Chinese for decades, disregarding their wishes and usually making deals that benefit us more than them. I think China sees this crisis as an opportunity to become the new world super power, and I don't think they'll be giving it up any time soon.

~Keeper

I think there may be forces at work that defy history. I have been scrutinizing this for a while... a change of course is possible, though not likely.
Source, article published 3-14-2009

Thousands still throng the shopping malls in Bangkok, but it’s all an illusion. From next month there will be bad news and more bad news.

THAIS are not jumping out of buildings just yet though Thailand is facing a more severe downturn than the 1997 Asian financial crisis which saw thousands committing suicide.

“It’s yet to come. By the second quarter of this year you should see many suicides,” said the man who counselled businessmen who contemplated committing suicide when they were hit by the Asian financial crisis.

Why the second quarter? Because by then those who have not given up hope yet will have no hope.

[edit on 15-3-2009 by burntheships]

reply to post by tothetenthpower


I think you're absolutely right. Although, at some point China is going to say "We've played enough of your games, and we've bought up enough of your worthless money... now it's time for action."

If China does that, then we will just have to nuke them. You are either with us or you are with the terrorists. China will never hold us hostage, in anything, and if they try we will show them the business-end of how "freedom" works.

Snarkiness off: the Treasury Report is due in the morning, 8am? Dow futures are down. I am near needing some serious panic-sex if anyone is interested....

FeverIAm's thoughts on this:

www.youtube.com...

Glenn Beck visual representation thingy:

www.youtube.com...

[edit on 15-3-2009 by pluckynoonez]

China probably will take it's money and run but that's because China is built on cheap labor. China will move it's money to a country that will consume their goods.

The problem with Americ is an out of control government that borrows and spends. In a global economy, you need small government so the people can borrow and consume as far as the eye can see and you will get more entrepreneurs and people making money in real estate.

When the government gets too big and increases debt by spending then our consumption will decrease and foreign governments will not want to hold our debt.

We need to reduce the scope and size of government, switch to term limits and go to public financing of campaigns so it's not about how much money they raise but the best ideas for the country. See these politicians know that it's money that secures their seats in Washington so they do what the money tells them to do. If Diane Feinstein or Mitch McConnell got the same amount of money to run for office as their contender then they would have to win on the best ideas and it wouldn't be about how much money they raise.

The kids(politicians) have had control of the candy store(our money) without supervision and now everybody is waking up sick.

Everyone is focusing on the AIG bonuses and ignoring what the Fed announced the other day and Geithner the other week!
The value of the dollar is being destroyed right in front of our eyes!

When the Federal Reserve met in January they voted on buying long term Treasury bonds, the vote was 1-9 against.

This week they announced that they are going to buy $300 billion in long term Treasury bonds, vote 10-0 for!

This is in addition to 750 billion of mortgage-backed securities this year, raising its total purchase commitment for those securities to 1.25 trillion.

Where did the Fed get over 1 trillion? The treasury "printed it", gave it to the Fed and the Fed bought long term Treasury bill!

Our money is going to be worthless, Inflation is now at the back door!

And how many of you paid attention to Geithner's new bank rescue program? It includes a plan to generate about 1 trillion in new consumer lending and to eliminate up to 1 trillion of banks’ bad assets.




[edit on 21-3-2009 by burntheships]

Like majic the Fed finds innovative ways to pump hundreds of billions of additional dollars into the economy? What has happened behind the scenes?

A FEW days ago Ben Bernanke, chairman of the Federal Reserve, was asked to identify the biggest obstacle to economic recovery. That “we don’t have the political will,” he replied.

Mr Bernanke showed his own will on Wednesday March 18th, when the Fed’s policy panel said it would purchase $300 billion in Treasury debt, mostly maturing in two to ten years, starting next week. It will also boost its purchases of mortgage-backed securities to a total of $1.25 trillion from a previously announced $500 billion, and its purchases of debt issued by Fannie Mae and Freddie Mac, the mortgage agencies, to a total of $200 billion from $100 billion.

The Fed had already said it was considering Treasury purchases, but expectations had waned in recent weeks. The announcement electrified investors, sending the Dow Jones Industrial Average up by 91 points, or 1.2%, and the ten-year Treasury bond yield down a stunning 50 basis points to 2.51%.

www.economist.com...


[atsimg]http://files.abovetopsecret.com/images/member/1737112fdd51.jpg[/atsimg]

reply to post by burntheships


What I want to know is...how many members of Congress are actually economists?

Why do we have people with little economic background, making sole decisions?

China, the world's largest Gold producer, is already diversifying - building a foundation for future domestic expansion - stockpiling strategic resources - establishing joint ventures - Canada - Africa - Sudan.

The latest TIC reports are troubling - ergo; the Fed made it quite clear - they've been forced into the treasury market to cap interest rates. Gold sounded the alarm immediately. In due time - the ramifications of this drastic move will filter through to the fixed income market.


Now, if faddish commentators at Fox News - don't want to look like they just fell-off the conservative turnip truck - so they could scramble aboard the populist bandwagon - they should dig a little deeper - all the way into the bowels of the beast.

There is sufficient evidence that when necessary, the Fed/Treasury complex has been monetizing US debt for years through Caribbean based hedge funds - affiliates of the US banking cartel.

Some fine investigative work by Ron Kirby exposed this scheme back in 2005

PIRATES OF THE CARIBBEAN (I've had this link stored on my hard drive since 2006)


John Galt picked-up the torch last month....

Has Back Door Debt Monetization Already Begun?

The answer to the title is “yes” but it is not back door and should have been obvious to any observer of the markets as early as last October. What if the United States Treasury under Hank Paulson set up a policy for the banks that received government financial assistance to ask them to use their offshore affiliates to purchase U.S. Treasury instruments to keep 10 year yields and thus mortgage rates artificially low?

Full Text

Jim Willie this month.....

Gold & Treasury Feeder System
by Jim Willie, CB. Editor, Hat Trick Letter | March 18, 2009

CONTROL FROM BERMUDA TRIANGLE

Notice how the primary impetus behind the supposed USTBond rally was the mountain of purchases this past autumn by the USGovt and UKGovt, as seen in the Caribbean banks, where their fingerprints are often found without any mention in the press whatsoever. The US & UK illicit games conducted in Caribbean banks is given cover from hedge funds and Arab accounts, but not enough to hide what is really happening. In July 2008, the Caribbean bank center ledger item showed $117 billion is USTreasurys. By October 2008 the amount zoomed up to $204 billion. This is not Bermuda and Bahamas redeeming sea conch shells, molasses barrels, and salvaged marine vessels for USTreasury Bonds. These are games played by the syndicates running the central banks

Full Text

Now there's a story for MSM....

GL

reply to post by OBE1


Good sleuthing! Thanks for passing on those gems...
As for the Fox commentator doing an about face...
Jim Cramer just did that, appently he needs to be loved more than telling the truth!


[edit on 21-3-2009 by burntheships]

reply to post by burntheships

Hi BTS. After the Kirby missive , the story seemed to dry-up. Good to see it circulating again. Under-handedness runs to the extreme , and as noted in your thread , for the most part , congress remains clueless - and effectively neutered by a power grab at the Federal level that should have us all sticking pins in our eyes.

Keep up the good work!

GL

The Federal Reserve made it very clear that they will just type in money into a computer and use that to purchase T-Bills if necessary.

Dollar has largest drop in one quarter of a century, since 1985 Plaza Accord on Fed Bond Buying...

March 21 (Bloomberg) -- The dollar dropped the most against the currencies of six major U.S. trading partners since the Plaza Accord almost a quarter-century ago as the Federal Reserve’s plan to purchase Treasuries spurred speculation that it’s debasing the greenback.

“What it introduces is the problem of the currency to the extent that the Fed is buying what isn’t desired by foreign holders,” said Bill Gross, co-chief investment officer of Pacific Investment Management Co., in an interview on Bloomberg Television on March 19. “The Fed can keep interest rates where they want to keep them, at least for a 6- to 12- to 18-month period of time, but it will have consequences down the road.”

www.bloomberg.com...

If China does that, then we will just have to nuke them.

I would agree. If the president was a patriot and pro-US. But he's not, nor was his predecessors.

The US will be owned by corporations. The US will be divided between others countries owning US debt. Like China in early 1900s. Enjoy.

And China can crash the US in a day. Just start dumping everything they've got in the US dollar, that would mean however about 800 billion lost + 10% of exports minimum. But they'll probably take that as collateral damage for a victory and turn it into a gain like North Korea saying the evil United States created this mess and tried to destroy China and pump the nationalistic pride.

[edit on 21-3-2009 by Vitchilo]

A chart for those who seem confused...

[atsimg]http://files.abovetopsecret.com/images/member/63fad0748171.jpg[/atsimg]

If China stops lending to the U.S.A. the Fed will just print the money.

Then all of China's dollar reserves will lose values in very painful amounts and in turn hurting them much worse than we will be hurt.

There is a very good reason why the Chinese have to lend to us and there is an even better reason why they hate us for that.

Must See Video Just Released!

What is China worried about?

Moving quickly along...at a brisk pace now China
calls for a new reserve currency.

www.ft.com...

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

Right behind the IMF paneling on reccomendation for a new
World Reserve Currency...
www.abovetopsecret.com...'

[edit on 03-23-2009 by bts]

[edit on 23-3-2009 by burntheships]