Does China Own the USA?


National emblem of the People's Republic of China

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What the hell are you doing? Will China lose its Money invested in the USA, and should they withdraw it before the S…. hits the fan?

With the Congress and the US President not being able to work-out a solution to resolve this ongoing problem the USA is in imminent danger of becoming a failed state. To much bickering is going on and with a President hell-bent on destroying this country, what is to be expected?

With concerns amounting regarding the decline of the American dollar, China is pressuring Congress to take action before the US economy is driven to default. As the biggest holder of US Treasury debt, China stands to be massively impacted if the debt ceiling isn’t raised which could lead to grave global consequences.

In a statement published on their website, the State Administration of Foreign Exchange writes, We hope the US government will take responsible policies and measures to boost global financial market confidence and respect and protect the interests of investors.”

As of April of this year, China held around $1.15 trillion in Treasury debt, making it the largest creditor of the States. Japan holds onto the second largest sum of American debt at around $912 billion, with the UK coming in third at $346 billion.

Should America be driven to default, the US would postpone payment to China and the American credit rating would drop. From there, the trillions of US dollars belonging to China would decline in value, which not only angers the Chinese for obvious reasons, but also means that goods produced overseas could cost more in America, impacting export initiatives out of the Far East.

Even if a default doesn’t occur, the US credit rating is already in jeopardy. Standard & Poor’s announced last week that there is a 50 percent likelihood that they will downgrade the US credit rating over the next few months, even if Congress can vote to raise the debt ceiling before the August 2 deadline imposed by the Treasury. “The positions of the administration and the Republican leadership are still very far apart,” S&P Managing Director John Chambers says to the Washington Post. “The tone of the debate has made us wonder whether a compromise can be achieved.”

Both Moody’s and Fitch have also threatened to cancel the current triple-A credit rating as attempts at negotiating on Capitol Hill and in Obama’s White House have gone unresolved.

President Obama said on Friday that Congress would need to come up with a plan before the weekend was over, yet the doomed deadline is still looming with debt discussions at a deadlock still.

 

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