China Urges U.S. To Protect Creditors After S&P Warning!
- The Chinese are sweating in their sleep when they think about the US$1T exposure to US debt. They have themselves to blame for keeping their currency undervalued for far too long. I am, however, sympathetic to their predicament. They did so to boost employment and thus boost prosperity for the low income masses. We should, in no way think that the coming US treasuries meltdown will only affect countries like China and Japan because of their large US treasury holdings. It will reverberate around the world and the USD will tank. Everyone will be affected to varying degrees. It will eventually lead to World War 3!
China urges U.S. to protect creditors after S&P warning
by Kevin Yao and Judy Hua, Reuters
BEIJING (Reuters) - China’s Foreign Ministry said on Tuesday that the United Statesmust take “responsible” measures to protect investors in its debt after Standard & Poor’s threatened to lower its credit rating on the United States due to a bulging budget deficit.
“We hope the U.S. government will take responsible policies and measures to safeguard investors’ interests,” the ministry said in a statement. China’s foreign exchange reserves, already the world’s biggest, rose by nearly $200 billion in the first quarter to $3.05 trillion. About two-thirds are estimated to be invested in dollars.
Beijing has repeatedly warned that loose U.S. monetary policy threatens the dollar, but it has continued to accumulate dollar assets at the same time, adding about $260 billion of Treasury securities last year, according to U.S. data.
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