Community | February 10, 2010 | 47 comments

China Threatens Sell-off of US Debt

source: http://www.reuters.com/article/idUSTRE6183KG20100209

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bansheewail
Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.

The calls for broad retaliation over the planned U.S. weapons sales to the disputed island came from officers at China's National Defence University and Academy of Military Sciences, interviewed by Outlook Weekly, a Chinese-language magazine published by the official Xinhua news agency.

The interviews with Major Generals Zhu Chenghu and Luo Yuan and Senior Colonel Ke Chunqiao appeared in the issue published on Monday.

The People's Liberation Army (PLA) plays no role in setting policy for China's foreign exchange holdings. Officials in charge of that area have given no sign of any moves to sell U.S. Treasury bonds over the weapons sales, a move that could alarm markets and damage the value of China's own holdings.
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  2. tags:
    News and Politics,  China,  national debt,  US Debt
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47 comments // China Threatens Sell-off of US Debt

  • Sublime_Emperor
  • Katmai512
  • Katmai512
    • 0
      Katmai512  

    • Could be just a posturing by China to save face. I'm hoping this won't escalate. Couldn't Washington's timing in selling weapons come at a worst time?

    • 2 years ago
  • ras_menelik
  • shockdoctrine
    • 0
      shockdoctrine  

    • remember when they threatened to do this last summer? unfortunately much of the chinese economy and specifically the yen is propped up not only by our debt to china but also by american corporations. nothing will change, both the u.s. and china will continue to subversively support each others enemies until a new world power steps up to trade in cheap goods and human misery with.

    • 2 years ago
  • ProjectBat
  • Nephwrack
  • DRudeBoy
  • kennymotown
  • 02
  • DRudeBoy
  • wally60
    • 0
      wally60  

    • sooner or later the us will go down .then we will have
      the CHAOS factor every nut in the world will go wild.
      not to say we dont have any here!

    • 2 years ago
  • kennymotown
  • dalistuff
    • 0
      dalistuff  

    • Get ready to have Apple pie in a third world country if this concludes like bush cronies never imagined their power greed would take.

    • 2 years ago
  • 02
    • +3
      02  

    • Don't buy Chinese stuff, ask your local stores to stock American-made and phase out Chinese stuff. The big distributors could easily get the message if people did this.
      We need to start making solid goods again and getting back to work and getting back to being proud of our work and our lives.
      We've had people sell our asses down the drain under the banner of "globalism" - we can turn that all around.

      But we have to do it.

    • 2 years ago
  • JonRaymond
  • 02
  • DRudeBoy
  • kennymotown
  • DRudeBoy
  • echoz
  • QuestionGeek
    • +1
      QuestionGeek  

    • I don't know why they don't just sell the USA to the Chinese. They practically own us anyhow with their mediocre products and financial straps.

    • 2 years ago
  • Nephwrack
  • JonRaymond
  • Mark701
  • echoz
    • +1
      echoz  
    • Image

    • "OK, this is what happens when one lets money men run our foreign policy. They sell us down the river and we lose all influence over other nations because we are in debt to nearly everyone now. So Taiwan can punch China in the eye and then shove us into China's face. China, a major source of funds for our dicator, is now shoving Bush back into Taiwan's lap. Meanwhile, the Japanese kick us in the shins while shoving us into China's face, too, while tripping over both Koreas which are striking back at Japan, if the Middle East isn't enough fun for us, welcome to the Far East, land of scrutible and inscrutible screw ups..."

      http://i3.photobucket.com/albums/y99/ElaineSupkis/clnfeb/China-fights-Taiwan-big...

    • 2 years ago
  • 02
    • +1
      02  
    • echoz:

      It's the republican way - all these people listen to Rush instead of their usual tin-horn preacher. They feel so powerless and the repubs promised to make them feel strong - and after all, the repubs are about money, etc.

      Too bad - the repubs got their way - which was allowing cheap-skate types (typical of Enron) to steal our money by middle-manning the wealth of the country to China.

      They all should be tried.

    • 2 years ago
  • echoz
    • 0
      echoz  
    • Image
    • 02:

      =D yes 02...and they should be also be made subject to potential waterboarding if we even suspect them of any 'truth' they might not otherwise tell us for our own defense, with substantially higher risks of being tazed by any shit-grinning idiot 10x over necessary, ankle-braceleted, and drug-tested, and indiscriminately video-monitored on his way to work so we know exactly when he's discreetly trying to pick his nose. They should also be made to suffer breath-a-lyzer-equipped vehicles and fanatically, religiously report directly to fuqtup judges to make sure he's using the right mouth wash... Yes, these should also be starved of any meaningful future or any merely practical living and given menial decades-stagnant wages for mindless "service-oriented" slave laborer work to become a dead-end worker in a dead-end career where he may certainlly be fired indiscriminately at any time and with no recourse (just like that fuqtup "at will" slavery state Texas) and/or simply jailed as any regular joe-loser underachiever, again indiscriminately, on virtually any mob-control "noncombatant" government-in-your-ass-and-your-face BULLshit laws...

      And then? well maybe, then...(pondering)...perhaps, more mercifully, finally, perhaps in some older wasted age, we may allow them to walk up their own gilded gallows to be hung in the name of government cost-accounted mandated by sheer unthinking policy euthanasia...all this just for being the richest thieves to ever sell their neighboring humanity outside their finer resort communities as worth less than the shit their poodles casually leave behind for you and me... somebody needs a job, don't they??? heh

      such does their selfish world exist....in more generally veiled but literally egotistical and more consistent acts of indecent living in SPITE of 'us'

      http://www.cartoonstock.com/newscartoons/cartoonists/jlv/lowres/jlvn576l.jpg

    • 2 years ago
  • Bushido
  • pennyharford
  • CalPal
    • +1
      CalPal  

    • I would be incredibly concerned with the PLA military right now, regardless if they have no noticeable voice in Chinese politics.

      They don't understand the economics of the world, yet they are, at least regarding economics, opposing the current Chinese government. If conflicts were to occur between the two groups - which may or may not be possible - it could lead to a coup, and if China was scary enough with their government now... well, let's just say I would sh*t bricks if they had a military government similar to ancient Chinese lords back during the Dynasties.

    • 2 years ago
  • magnusdeus
  • Katmai512
  • bansheewail
  • bking74
    • +1
      bking74  
    • bansheewail:

      Iran does have a huge crude oil and natural gas supply but the Kandahar pipeline in Afghanistan is nearing completion and as long as Big America Oil hasn't claimed it yet. Which I don't believe they do simply because Canadian companies are helping the Afghan people develop it, it's a shorter distance though a pipeline to China then a long ocean voyage from Iran.

    • 2 years ago
  • KSirys
  • trut
    • 0
      trut  
    • bansheewail:

      I IMAGINE Iran will not take American dollars. If I was China I would start getting rid of my US$ as soon as possible and certainly wouldn't purchase any more debt. Why?

    • 2 years ago
  • drizake
    • 0
      drizake  

    • isn't the US their main source of income via export? if the US dollar was worth less wouldn't that mean their exports would suffer? sounds like they are stuck. although it would be an interesting development to watch

    • 2 years ago
  • EdJoyProductions
  • drizake
  • trut
    • 0
      trut  
    • EdJoyProductions:

      Any oil or commodity selling country or company that will take US bonds. Until the dollar completely collapses US$ will still be honoured.
      Who will be the last sucker holding the bag of garbage in the end?
      If there were any justice on this planet it would be the American people alone.

    • 2 years ago
  • tommytripper
    • 0
      tommytripper  
    • EdJoyProductions:

      scary answer... i could see everyone the US gov't bailed out...

      can you imagine, any of the listed below owning American dept and due to lack of payment, repossessing parts of the US...

      JP Morgan, Citigroup, Wells Fargo, Bank of America, Merrill Lynch, Goldman Sachs, Morgan Stanley, PNC Financial Services, Bank of New York Mellon, State Street Corp, Capital One Financial, Fifth Third Bancorp, Regions Financial, SunTrust Banks, BB&T Corp, KeyCorp, Comerica, Marshall & Ilsley Corp, Northern Trust Corp, Huntington Bancshares, Zions Bancorp, First Horizon National, City National Corp, Valley National Bancorp, UCBH Holdings Inc, Umpqua Holdings Corp, Washington Federal, First Niagara Financial, HF Financial Corp and last but not least Bank of Commerce.

      This is a list of every company that was “given” US tax payer money that I could find. As part of the “payout” I mean bail out.

      Think about it, lets start renaming states after the company that bought them, why bother owning a stadium (its so yesterday) when you can own an entire state, paid for with the money that was stolen from tax payers.

    • 2 years ago
  • trut
  • bethopea
    • 0
      bethopea  

    • If the US $ would drop, let's say to 1/2 its value, then wouldn't it's foreign debt also drop. Granted this is not the best of situations, but I can see it hapening.

    • 2 years ago
  • healthcare12345
  • bking74
    • +4
      bking74  

    • For them to cash in their position the U.S. would have to impose substantial tariffs on Chinese Imports, or unilaterally Value the Yuan were it is supposed to be valued (my guess would be 3 or 3.5 Yuan to the Dollar). Neither of those scenario's are going to happen .Outside that they won't dump their position in Treasuries. They might stop buying if we don't start showing a willingness to get our Fiscal house in order (which we've yet to do). If they stopped buying Rates would grind higher here, especially on the back end of the Curve. A `dump' would be too painful for everyone involved. The Market would read it as a dump and that wouldn't be good for anyone. Like it or not (and the Chinese don't) we are locked in an inter-dependent relationship. With respect to the effect on the Dollar? It would depend on what they did with the Dollars they received for the Treasuries. If they sold their Dollars everyone else on the Planet would as well. Even the Global Currency Market isn't big enough for that.The `bids' would back up to levels never seen before. Remember outside the U.S. Treasury no one holds more Treasuries than the Chinese (the Japanese are third behind the Treasury and the Chinese). This would make the Great Depression look like a minor Recession. Think Dogs and Cats living together.

    • 2 years ago
  • bansheewail
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