The signs have been apparent for some time now. American citizens are too wrapped up in sport and play to even see it. Our arrogance will cause us much dispair when this comes to pass.
Article source: http://www.naturalnews.com
Written by J. D. Heyes
(NaturalNews) When the head of a credit ratings agency in the country that holds most of your debt says your currency is in danger of being “discarded” by the world, you should probably listen.
Earlier this week, just two days after Standard & Poor’s downgraded America’s credit rating for the first time in our history,
Guan Jianzhong, chairman of Dagong Global Credit Rating, said the dollar was set to be “discarded” by the rest of the world, and that the “process would be irreversible.”
At the time of the report, U.S. markets had yet to react to the news the government’s rating had been scaled back. But by Monday of this week, news had spread quickly, wreaking havoc on American and global stock markets; it wasn’t clear how much of an effect Guan’s statement had on those markets, but clearly any such statement by a Chinese firm would make waves.
That’s because China is the largest holder of our debt. And clearly the Chinese are worried about their investment.
In fact, it could be the reason why the debt ceiling was eventually raised in the end, despite the long, rancorous debate and promises by most of the members of at least one party (Republicans) to hold firm against raising the ceiling barring any significant spending cuts.
Consider that China has been the most vocal critic of the U.S. debt crisis.
“The only way the Americans have come up with to improve economic growth has been to take on new loans to repay the old ones,” a scathing editorial published by the official Xinhua news agency said last week. “To eat May’s grain in April, however, will never be a permanent solution to a problem.”
The editorial also contained a warning. It said China could continue to dump its holdings of U.S. dollars if Washington was incapable of tackling its crippling debt. If the Chinese don’t continue to buy our debt, who will?
Not Canada, our benign neighbor to the north, which holds some of our debt – about $3.6 billion, making the Canadian government the 15th largest holder of our red ink. They are joined by such nations, city states, industries and corporations as Hong Kong, Brazil, Britain, banking centers in the Caribbean, depository institutions and U.S. state and local governments.
And not the Japanese, which is the second-largest nation holder of U.S. debt, because of their own economic problems. Maybe the Federal Reserve will buy more which, at more than $5.3 trillion, makes it the single largest holder of U.S. government debt. Did you know that?
But whoever it is, the Chinese have perhaps the biggest stake because with trillions of dollars worth of U.S. Treasury bonds, the dollar must keep its value or Beijing will lose its proverbial shirt. So China encourages a debt ceiling deal then complains that it’s not enough and warns it will divest itself of our money if things don’t change.
Anyone who isn’t listening in Washington remains deaf, dumb and blind to this ticking time bomb at their own peril.