By Ambrose Evans-Pritchard in the Telegraph
The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.
Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.
Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.
More to the story in the Telegraph ... a British paper, because you won't get the full story from a reliable source in domestic papers. You won't hear much about it on Fox Noise, either!
The Chinese have been buying our debt for some time now. That debt has financed the housing bubble and it has financed our elective war in Iraq.
Recently, I had questions about the situation and I expressed them in this blog. I commented on it here as well.
Now it appears we are faced with the prospect of the chickens coming home to roost. The so called conservatives, with their concern for flag burning amendments and gay marriage have not kept their eye on the ball. Things are getting economically dangerous. For twelve years they had control of Congress. It's not like this "perfect storm" was not foreseeable ... many people have been talking about it for several years now. The so called conservatives who had the power of the purse for twelve years, ending in the 2006 mid-term elections either didn't see it coming - which means they were incompetent or saw it coming and willfully did nothing ... which is worse. It's tantamount to treason.
Tax cuts for the rich and borrow, borrow, borrow to make up the difference. Now we're all going to be paying a price. Tax cuts and borrow for the war. Tax cuts and give away the budget surplus.
They've killed themselves as a political force for a generation or more into the future. All the years they struggled to gain the upper hand ... the power they had in the 1950s under Eisenhower and into the Nixon era ... and the best they could give us was Bush and their policy of spend and borrow!
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