Friday, March 13, 2009

The US bonds are not quite secure?

China PM expressed concern that massive US deficit spending and near-zero interest rates could erode the value of China's bond holdings.

China is the biggest holder of US government debt and has invested an estimated 70 per cent of its $2 trillion stockpile of foreign exchange reserves, the world's largest, in dollar assets.

"We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets," Wen said.

What will happen if China pull out its capital out of the USA, one day? This strange hybrid relationship between the free capitalism and communism seems well, quite unstable if not dead born in the long term. What if Obama's bailout fix fail the next year?


Comments: Post a Comment



<< Home

This page is powered by Blogger. Isn't yours?