Chinese Think Tank Warns Geithner Over Trade War, Threatens To Dump U.S. Debt In Retaliation
Sep 15, 2010 at 12:58 PM
DailyBail in U.S. Treasuries, china, china, dalai lama, debt and deficits, geithner, geithner, trade war, yuan

This is what happens when you borrow trillions from your economic competitors.  The Dalai Lama has to leave thru the back door.

Ding Yifan, a policy guru at the Development Research Centre, said China could respond by selling holdings of US debt, estimated at over $1.5 trillion (£963bn). This would trigger a rise in US interest rates. His comments at a forum in Beijing follow a string of remarks by Chinese officials questioning US credit-worthiness and the reliability of the dollar.

China's authorities seem split over how to respond to moves on Capitol Hill for legislation to punish Beijing for holding down the yuan. The central bank has ruled out use of its "nuclear weapon", insisting that it would not exploit its $2.45 trillion of foreign reserves for political purposes. "The US Treasury market is a very important market for China," it said.

However, the mood is hardening on both sides of the Pacific. The dispute risks escalating if China's trade surplus with the US climbs further and more US jobs are lost. US Treasury Secretary Tim Geithner, who has taken a softly-softly line in the past, said on Friday that China had done "very little" to correct the undervaluation of the yuan since ending the dollar peg in June.

Mr Ding reflects thinking among some in the Poltiburo, who seem convinced that the US is in decline and that China's rise as an exporter of goods and capital give it the upper hand.

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Then there's that little problem when the Dalai Lama comes to town:

Solidarity with Tibet and the Dalai Lama should never be subordinate.  Today, instead of Mother Liberty, we suckled at the breast of RED Chinese Totalitarianism.  Our principles are now vanquished and replaced by obligations of government debt.

 

 

Maybe that's why Hillary sounded the alarm last week, while taking a shot at Obama over the national debt.

 

 

 

 

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