China’s $2 Trillion Hole -- Minxin Pei, The Diplomat
The US debt negotiation ceilings are going to the wire. China, the biggest holder of Treasury debt, is watching on helplessly as it gets taken to the financial cleaners.
The political drama in Washington over raising the United States’ federal debt ceiling has grabbed the world’s attention. While the main protagonists in the play are the Republicans and Democrats, one spectator anxiously awaiting the outcome of the bitter partisan struggle is undoubtedly China, the largest single holder of US Treasury debt (roughly $1.1 trillion).
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Update: President Obama: Deal reached on debt crisis -- CBS News
My Comment: Tonight's agreement in Washington on resolving the US debt problem is NOT going to solve the long term U.S. problem of too much debt, and a trend of even greater debt in the future. Credit rating agencies have been blunt that none of these plans will maintain America's credit rating, and for foreign holders of debt like China .... expect further depreciation and a lower value of your US holdings.
China being taken to the cleaners .... LOL .... they have seen nothing yet.
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