China Warns US Not To Default On Its Debts!!
Posted in the China Forum
#1 Nov 26, 2012
China Flexes its Muscle, Tells U.S. it is 'Playing with Fire' If it Defaults
COMMENTARY | The Chinese government has owned the United States since it began financing its debt and now it is going to flex its muscle and exert its control over its subjects. A Reuters story quotes an adviser to China's central bank saying the United States is "playing with fire" if they choose to default on their debt even if it is for a few days.
Li Daokui, an adviser to the People's Bank of China, told an impromptu gathering of reporters in Beijing, "I think there is a risk that the U.S. debt default may happen. The result will be very serious and I really hope that they would stop playing with fire."
China is the largest debt holder for the United States, holding more than $1 trillion in Treasury debt and it has already discussed discontinuing their support in recent months. China's hold on the United States is inescapable and its stature as an ally is tenuous at best.
China has built its infrastructure and its military with money financed from the debt off the backs of the U.S. government. The reason the U.S. has allowed itself to fall into this uncomfortable place is out of control government spending.
It is time to swallow hard and make some tough decisions before China begins to tighten the screws and further influence American policy. Does President Barrack Obama have a plan to extricate the United States from under China's thumb? Judging by the actions of the administration they are not taking its creditor seriously. The doubling of the administration's limousine fleet is just one obvious example.
If the administration underestimates the Chinese government's fears the consequences could send the economy back into a downward spiral. "I really worry about the risks of a U.S. debt default, which I think may lead to a decline in the dollar's value," Li said in a dire prediction for the U.S. economy.
This is the time to make a deal and make some deep cuts in the spending of this out of control government. Congress needs to work with the administration and cut into the $14 trillion deficit immediately, especially if a temporary raise in the debt ceiling happens. The administration can return a couple hundred of those limousines they purchased as well to show China they are serious about cutting back.
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