“China’s foreign ministry on Tuesday urged Washington to protect investors in its debt……According to US data, China held $1,154.1bn in US Treasuries at the end of February, making it the largest foreign holder of US debt ahead of Japan’s $890.3bn. The Federal Reserve is the largest overall holder of US Treasuries with $1,368bn on its books. “
“Lorenzo Bini-Smaghi, a European Central Bank policymaker, said on Tuesday that S&P’s warning showed the US must move quickly towards more restrictive economic and monetary policy now that its recovery was seen to be gaining in strength.”
http://www.ft.com/cms/s/0/46728a90-6a35-11e0-86e4-00144feab49a.html#axzz1K3tVPLFH
China isn’t happy and is the second larest U.S. Debt holder. Japan, the third largest US. debt holder has its own set of unfortunate problems. The largest holder of U.S. Debt, the Federal Reserve is basically devaluing its own currency. Meanwhile the U.S. Govt. can’t reign in debt/expenses and many countries are trying to do more non-U.S. dollar-based business . Gold has hit an all-time high of $1,500/ounce. Silver has hit a 30 year high of almost $45/ounce. I’ve been saying for a long time that the U.S. Government MUST reign in debt, raise revenues and get its financial house in order otherwise I don’t see how all of this bodes well for the U.S. Dollar nor the U.S. economy in general.
FT: “China signals unease after S&P warning”
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