The Chinese Premier Wen Jiabao is worried about the state of the US Economy and our ability to pay them back.
"Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried," Wen said at a news conference Friday after the closing of China's annual legislative session. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets."
"China is telling the U.S. to be careful, not to overspend and keep an eye on the dollar," said Kelvin Lau, regional economist at Standard Chartered in Hong Kong. "There are risks that China cannot control, so they're depending on the U.S. to maintain fiscal prudence and keep the dollar reasonably stable."
"Inside China there has been a lot of debate about whether they should continue to buy Treasuries," said Frank Gong, chief China economist for JP Morgan.
A couple of items in this article concern me. First off, in the fourth paragraph, " China is TELLING the U.S. to be careful", not asking, not advising, not suggesting, TELLING us.
Secondly there was this sentence in the article:
Wen gave no indication whether Beijing wants changes in U.S. policy.
The above statement implies that Bejing could ask for a change in US Policy. This is what happens when a foreign country invest heavily in US Debt. They position themselves to be able to start dictating policy to our leaders. We cannot allow this to happen.
China already holds about 1 Trillion in US Debt. This is staggering, and we are about to add another 787 Billion to that. We cannot continue on this path. We should be searching for other ways to stimulate the economy and GET RID of the pork barrel earmarks, this is not the time for them.
Some have even suggested that China could invoke eminent domain and take US property as collateral for the loans. I don't know if I'd go that far but it is a looming question: If China called in its loans and we are unable to pay, what would happen?
President Obama has placed restrictions on CEO pay of some of the firms that have received bailout money, does anyone doubt that the Chinese could begin to dictate US Policy under the threat of calling in the loans if we don't comply.
I'm not saying that will happen, I'm just saying that the possibility exists and I believe we must remain very cautious in dealing with China, as it appears that they are becoming very cautious in dealing with us.
Lower the payroll tax deductions and kill the earmarks projects and you will see the economy begin to pick up on its own, the people will have more money to spend each week, and the government will not have to finance unnecessary projects, thereby not having to tax us to pay for them.