China finances the U.S. lifestyle and economy by purchasing our debt and dollars. Basically, China extends the U.S. a credit line to fund the U.S. government by buying our dollars and notes. Americans then use this credit to buy crappy Chinese goods that sometimes poison and injure people. If and when China cuts off the U.S. credit line, then it will be utter chaos for this country, because we have no manufacturing base or anyway to generate money aside from borrowing.
China is now dumping its U.S. Treasury holdings to fund various foreign deals, because China is trying to diversify -- particularly in emerging markets like Africa. One wonders whether you can blame China for dumping dollars after the Federal Reserve has pumped trillions of new dollars into the economy over the last year.
Is the hammer about the fall on the U.S. economy?
Source: Reuters
China is now dumping its U.S. Treasury holdings to fund various foreign deals, because China is trying to diversify -- particularly in emerging markets like Africa. One wonders whether you can blame China for dumping dollars after the Federal Reserve has pumped trillions of new dollars into the economy over the last year.
Is the hammer about the fall on the U.S. economy?
Please don’t call it a liquidity crunch, but it rather looks as though China might have had to sell a sliver of its vast hoard of U.S. Treasury paper to fund its private sector’s big overseas foray.
China’s holding passed $800 billion in May, sparking speculation that it could reach $1 trillion within a year, but the net June figure, published on Monday, showed a 3.1 percent drop to $776.4 billion, the biggest percentage fall in nearly nine years.
Source: Reuters
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