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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (16317)	7/28/2009 1:15:45 PM
From: DuckTapeSunroof	Respond to of 103300

Re: "Premier Wen publicly stated that he is worried about the ability of the US to pay back its huge debts to China" Yes he did! (And then they went on a record-buying binge for federal bonds. Maybe they were trying to get a better price? <GGG>) Re: "China has been diversifying into commodities and other real assets..." Yes they have, (&, IMO, that's smart....) But they can only stockpile just so much copper and coal and such... and they have run into BIG PROBLEMS trying to buy whole companies and mining projects and such in a number of foreign countries (US, Australia, Mongolia, Africa, etc., etc., etc.) There seem to be some clear limits as to what foreign countries are willing to let them buy --- and nationalism plays a large part in it. (And none of that stuff is anywhere near as liquid as the bonds anyway... and only the bond purchases can 'sterilize' the massive in-flow of dollars that they receive from their exported manufactured goods. Without 'sterilizing' that huge pile of dollars by rolling it back into dollar investments like bonds there is MASSIVE IRRESISTIBLE upward pressure placed on their currency the Yuan.) So they are really between a rock and a hard place --- no way to maintain their currency peg to the Dollar unless they buy massive amounts of US bonds. The currency speculators like Soros would pick them apart.