China holds over $700B worth of U.S. Treasury bonds, so when their leadership starts getting anxious about the U.S. pissing money away, we should probably listen up. Kind of like when your parents threaten to cut off your allowance when you spent all your cash buying up Magic the Gathering cards and 2 Liter bottles of Shasta (don't judge me). So Premier Wen had this to say on Friday [UPI]:
Wen told Friday's session of the National People's Congress in Beijing he was "definitely a little worried" about China's investments in the United States.
"China is indeed the largest creditor of the United States, which is the world's biggest economy. We are extremely interested in developments in the U.S. economy," Wen said, according to a report from China's official Xinhua news agency.
"The Obama administration has adopted a series of measures to counter the international financial crisis. We are expecting these measures to take effect," Wen said. He stressed what he called China's principle of guaranteeing the "safety, liquidity and good value" of the nation's foreign exchange reserves -- the largest of any nation in the world -- and the importance of cautiously investing the reserves and diversifying in many different places.
Indeed, the Obama administration has tried all sorts of spending frenzies to fix the banking crisis, titillate the economy, and pay off friendly congressional districts with pork projects. But financial leaders admitted today at the G20 conference that the government intrusion into the market has not had the desired effect of stabilizing the worldwide economy. I'm not sure what else world governments can attempt to give the recession another shot in the arm, because they've tried damn near everything. We'll just have to accept the fact that, like the famous commercial, we are in debt up to our eyeballs. Sucks to be in a weakened position, and incidents like the USNS Impeccable getting harassed on the high seas are going to be the new norm.