China, US Debt, Inflation
February 22, 2011
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China holds about $900 billion of U.S. debt and it should be seriously concerned with the debt. China has spent years holding down the value of its currency to boost exports. Basically, China is able to sells way more goods to U.S. than the other way around. China then prints yuan to absorb the dollars that flow into the country in exchange for its exports and invests the massive holdings of dollars in US treasury by loaning it back to the US. Essentially, China is lending Americans money to continue buying Chinese goods.
This interference in free market has created two major problems for China… read more