Posted by: rbbadger | December 21, 2009

China and U.S. debt

The USA, unlike most other developed nations, is largely financing itself these days through debt.  I’ve read about other countries such as Singapore and China who’ve largely pursued sane fiscal policies.  The Chinese have amazing amounts of savings as does Singapore. 

Much of our economic growth has been based on an illusion.  Basically, our government has been financing all of the amazing blunders they do by issuing insane amounts of bonds.  A few months ago, Queen Hillary was Beijing and Seoul begging the leaders of both governments to buy more bonds. 

Zhu Min, the deputy director of the People’s Bank of China, recently stated that “the world does not have so much money as to buy more US treasuries”.  You can read his remarks here.  Basically, American citizens are saving more and spending less.  This impacts the ability of foreign countries to get US dollars with which to buy treasury bonds.  The USA is going to have to resort to something to get a handle on its deficit, but seeing as politicians only care about getting reelected, you can hardly imagine that they’re going to plan for something as important as our future.

I mourn for my country and for what it has become.

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