China has 'canceled US credit card': lawmaker

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.

source

This is scary, if true. China is basically keeping us afloat while the government spends us into oblivion. If they've cut off our credit, i fear things could get a lot worse than they already are. Hopefully, someone out there can disprove this. If not, i suppose it's the time to prepare has already passed.


TA

I think that it's no secret China no longer wants to fund our debt, would you? Can you imagine being a citizen in third-world China knowing that your tax money was being lent to us westerners? However, they probably won't just stop lending us money overnight, because if they do I think that the dollar would crash, and that would make the holdings that they have now completely worthless. Instead I think that they will slowly try to put their money into other economies around the world and slow down on new treasury purchases. I guess no one ever told China not to put all their eggs in one basket.

When the foriegn purchase of debt finally does start to die down, we can look forward to the Fed using freshly made money to buy Treasuries, aka Monetizeing the Debt. When this happens, prepare for inflation, as the dollar will become devalued. Remember what happened in Germany's Weimar Republic pre WW2, wheelbarrow time. Well, hopefully it doesn't ever get that bad.

Warren Buffett: Inflation on the horizon

PS: What do you call it if you print money at home? Counterfiting!!
If the goverment does it? Monetizing!

[edit on 3-5-2009 by oneinthesame]

I am not surprised. Oh, crap.
Am I off topic? I never know. Until my butt gets spanked.

Meanwhile, didn't Hillary visit China a few months ago and she was rebuked? I remember reading that somewhere. Oh, if I only filled my computer with all these reports. Then I would be able to present the truth without relying on common knowledge and memory. But, yeah. China can't keep propping up our defucnt economy. Nobody can. Not even us.
We no longer have a manufactoring base. Oh, yeah. An informations base. Duh.l Information is all about the world,now. Hire somebody for 16 dollars an hour to give out information, or hire someone to give out the same info for 6 dollars an hour? Remember, only republicans outsource. democrats keep the jobs in county. You know, guys like Michael Moore. Heh. Wait, he only outsources jobs to Canada because it makes his messages more affordable.

reply to post by kyred


You're right about Hilary.

"It would not be in China's interest if we were unable to get our economy moving again," Clinton said in an interview with a Chinese television journalist, according to reports.
...
Concerns have run especially high in the last week that China, the single largest holder of Treasurys, will keep buying, even though some of the biggest Treasury dealers say there have been no signs of a decline.

Clinton urges China to keep buying U.S. debt
www.marketwatch.com...

It scares me that on her first official act as Secertary of State was to go to China for a handout. That was also around the time that China's government was expressing concern over the US dollar holdings. "Magically" a day or to later Citi said that they had managed to turn a profit, but later that turned out to be a mistake // We have to keep China happy

We, as a nation, need to move away from credit. We need to tear up our credit cards and live within our means. We need to get away from this mad dash for the material. We need to tell Mr. Jobs that we no longer want his overpriced designer junk and we need to get away from microsoft, too. Let's just buy what we need for awhile and nothing more. Otherwise, bow down to your new Chinese overlords. While the western way is slowly creeping into the middle kingdom, most of them are still very frugal and save most everything they earn. Learn from them now, before they mandate everything you do.

Then again. A Chinese overlord can be great fun ...

reply to post by tamusan


The problem is that I think it's already to late. Getting back to basics won't work anymore. The problem is that most of our economy is based on that designer junk of which you speak, we don't make anything of real value anymore. If everyone stoppped buying a new Iphone every year (or car, whatever it is), Apple would go under, their employees would be homeless, stop shopping at other stores, because they have no money, those stores would go under and on and on. It'ws all a big cycle built on a very big lie. Our economy needs to continually expand, otherwise it will completely unraviel faster than you can blink. Issac Newton said that evey action has an equal and opposite reaction and it's true. If one person losses their job, it creates more job loss. Like it or not we live in a Ponzi Scheme, that requires continued expansion through the use of credit to continue to function. Getting out of debt, or going further into it, at this point it really doesn't matter anymore, our economy just isn't fundementally strong enough to keep going forever. Contiuned growth will never happen without bigger and bigger debts

I really believe it is going to unravel no matter what we do. How many of those products, such as the iPod are made in the U.S.? On the back, my iPod says "Designed by Apple in California Assembled in China." I may be wrong, but I bet the components are also manufactued in China. So, who's losing thier jobs? Mostly some underpaid Chinese factory workers would be losing jobs.

American companies have outsourced everything they can to places where they can have the product made cheaper. And cheaper is not just the cost of making the product. The product itself is cheap.

The way things are going, most Americans will soon be underpaid Chinese factory workers.

Things are going to unravel anyway. So why is it wrong to quit buying the crap they push on us? The money doesn't stay here anyway.

Let it all collapse. Americans are resourceful, we will get it going again. Maybe we can get back to made in the U.S.A. and have it mean something again.

All I can say for now is buy local. Support your local economy. If it has to come in on a boat, we should not buy it.

Originally posted by tamusan
I really believe it is going to unravel no matter what we do. How many of those products, such as the iPod are made in the U.S.? On the back, my iPod says "Designed by Apple in California Assembled in China." I may be wrong, but I bet the components are also manufactued in China. So, who's losing thier jobs? Mostly some underpaid Chinese factory workers would be losing jobs.

However much I love my iPod (and other Apple stuff), I realise that there are companies in other countries than the USA that has companies that need to manufacture and assemble goods. Probably more so than the USA. I think we won't see many Chinese factory workers lose their jobs because of the USA. Instead I think we'll see countries in that region start doing business more and more with each other directly rather than going through the USA as the intermediary.