Earlier this week 150 Chinese diplomats where hosted by Tim Geithner and Hillary Clinton in an attempt to resolve concerns about the state of our nation’s economy. Following the talks President Obama issued the statement, “Cooperation, not confrontation” referring to the future of the United States relationship with China.
The relationship between the United States and China will undoubtedly reshape the global economy, and if not handled correctly could have devastating impacts on the future of society as we know it.
China is currently the largest foreign holder of U.S Treasury Debt in the world, holding more than $1 Trillion in U.S. Treasury securities and other U.S. government bonds. Never before has the U.S. been so heavily financed by a foreign country. Some criticize China’s poor monetary policy while others believe that the U.S. is secretly plotting to destroy the Chinese economy. In March of 2009 Forbes Magazine reported, “If you owe China $1 billion, it's your problem. If you owe China $1 trillion, it's China's problem.
A more accurate statement would be, “If you owe China $1 billion, it's your problem. If you owe China $1 trillion, it's your problem.”
Based on what we know about china, do we really think that this is going to end well?