If you owe your bank $1,000 you have a problem, but if you've borrowed $1 million it's the bank that has the problem.
Going by that old maxim, then China, which has lent the United States upwards of $1.3 trillion, has a very big problem.
And it knows it. As a consequence, Beijing is diversifying its overseas investments and pressing U.S. officials for an "exit strategy" from the ultra-loose fiscal and monetary policies that China fears will eventually inflate away the value of its U.S. bond holdings and fell the dollar.
"We have seen the growing integration of the Chinese financial system into the global economy, and over time we will see a gradual enhancement of the role of renminbi," Charles Dallara, managing director of the Institute of International Finance (IIF), told a meeting of his group in Beijing last week.
"Will it replace the dollar?" Dallara asked. "The fact is that I don't think this is what Chinese officials want."
And the reason for that is simple. What the Chinese want is for the US government returning to the task of printing its own currency.
The US Government, through an Executive Order signed by President Kennedy, gives the government the ability to print its own currency, and not use currency coming from the Federal Reserve.
The banks and the Fed don't particularly like this, one bit.
The last President who actually did this (Lincoln) wound up assassinated, and the last President who signed this executive order (Kennedy) wound up assassinated as well. Get the picture.
A list of my faves
- The Curious Cat Lives
- This Could Happen To You
- Girls Doing Men
- Alltop Oddities
- Herald Police Blotter
- My Man Mumbles
- Girl power at its finest
- Super cool T's
- Straight Talk