From the Wall Street Journal:
In a biting commentary, [Xinhua] urged the international community to improve supervision over the U.S. dollar and said the world may need “a new, stable and secured global reserve currency to avert a catastrophe caused by any single country.”
“China, the largest creditor of the world’s sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China’s dollar assets,”
The remarks came after the Standard & Poor’s Friday removed the U.S. government from the list of risk-free borrowers, citing concern about the rising burden of long-term federal debt.
China, with over $1 trillion invested in U.S. Treasurys, is among those that would be most immediately affected by any U.S. default or downgrade.
I couldn’t agree more, but more than that I can’t help note the severe case of irony we have here: a supposedly Confucio-Communist dictatorship lecturing the “Global Liberator”, “Protector of Freedom”, and “Home of Capitalism” on the nature of Capitalism. And who is right? The “Communists”. Creditors have every right to demand repayment and transparency, not an endless stream of money-printing, obfuscation and broken promises. If America does not like China meddling in American affairs, then they should have never allowed them to purchase American debt.
Of course, as this publication has consistently noted the real question is whether or not China will escalate into a full-blown trade war when America’s (predictable) response to events is money-printing, budget dithering and “inspirational speeches” from Obama.
Blah Blah Blah Blah Blah Blah Blah