Beet
Atlas Star
Posts: 28,914
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« on: February 10, 2009, 10:45:38 PM » |
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Duh, as I have said: America needs to figure out what it is going to export. That is the only way that China's holdings of U.S. government debt won't be "eroded", is for the U.S. to export to China.
But there is that old saw- if I owe you a $1 million, I'm in trouble. If I owe you $1 billion, you're in trouble. China doesn't want a dollar crisis any more than we do. Part of this expression of concern is the same concern U.S. policymakers have.
Their holdings of Treasuries will decline only because their current account surplus with us will decline (which is a good thing, in the long run), meaning that their reserve growth rate will fall off.
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