U.S. caught China buying more debt than disclosed

Kaye Beach

August 2, 2011

Does this make anyone a little nervous?

U.S. caught China buying more debt than disclosed

Originally published  Thu Jun 30, 2011

(Reuters) – The rules of Treasury auctions may not sound like the stuff of high-stakes diplomacy. But a little-noticed 2009 change in how Washington sells its debt sheds new light on America’s delicate balancing act with its biggest creditor, China.

When the Treasury Department revamped its rules for participating in government bond auctions two years ago, officials said they were simply modernizing outdated procedures.

The real reason for the change, a Reuters investigation has found, was more serious: The Treasury had concluded that China was buying much more in U.S. government debt than was being disclosed, potentially in violation of auction rules, and it wanted to bring those purchases into the open – all without ruffling feathers in Beijing.

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Dr. Michael Coffman on the same subject;


By Michael S. Coffman, Ph.D. and Kristie Pelletier
July 26, 2011

As the European Union appears to be heading for total collapse, Progressive Democrats seem to have completely lost all connection to reality and refuse to take any corrective action on our out-of-control deficits and staggering national debt.

In addition to the now probable economic collapse in Europe negatively affecting the U.S. economy, America’s staggering $14.5 trillion debt and trillion dollar deficits also threaten to sink us. There are two sides to the debt problem; (1) the inability or unwillingness of China and Japan to continue loaning us money to fund our enormous deficits and expand our debt; and (2) the progressives in the U.S. continuing to fast-track America toward economic ruin.

China is the United States’ largest lender and holds at least $1.115 trillion in U.S. government debt, approximately 26 percent of all U.S. debt. There is compelling evidence that China’s banks are thoroughly corrupt and its economic might is just a new credit bubble.[1] China’s local governments are carrying at least a $1.7 trillion debt, most of which is coming due over the next five years with only a weak ability to pay it off. If China’s economy flounders, will it be able to buy U.S. Treasuries to increase and sustain our deficits and debt?

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