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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Clinton Urges China to Keep Buying U.S. Treasury Securities

Posted by WARREN MOSLER on February 23rd, 2009


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We don’t need China or anyone else to buy our securities to finance our stimulus plan. And acting like we do and going on the defensive like this is radically counterproductive at best.

And isn’t she pledged on record to helping US jobs rather than increasing exports? Yet here she’s pushing the notion that China should buy our bonds to help us resume buying their imports?

The informed position is to first recognize that imports are real benefits and exports real costs, and therefore we benefit by foreigners net saving $US financial assets of any type, as it allows us the benefit of more imports and improved real terms of trade.

And this is what happens when you are hopelessly out of paradigm:

Clinton Urges China to Keep Buying U.S. Treasury Securities

by Indira A.R. Lakshmanan

Feb 22 (Bloomberg) — Secretary of State Hillary Clinton urged China to continue buying U.S. Treasury bonds to help finance President Barack Obama’s stimulus plan, saying “we are truly going to rise or fall together.”

“Our economies are so intertwined,” Clinton said in an interview today in Beijing with Shanghai-based Dragon Television. “It would not be in China’s interest” if the U.S. were unable to finance deficit spending to stimulate its stalled economy.

The U.S. is the single largest buyer of the exports that drive growth in China, the world’s third-largest economy. China in turn invests surplus earnings from shipments of goods such as toys, clothing and steel primarily in Treasury securities, making it the world’s largest holder of U.S. government debt at the end of last year with $696.2 billion.

China’s leaders understand that “the United States has to take some very drastic measures with the stimulus package, which means we have to incur debt,” Clinton said. The Chinese are “making a very smart decision by continuing to invest in Treasury bonds,” which she called a “safe investment,” because a speedy U.S. recovery will fuel China’s growth as well.


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5 Responses to “Clinton Urges China to Keep Buying U.S. Treasury Securities”

  1. manny valesco Says:

    Warren, what if clinton had sold her soul to satan and wanted her chinese friends standard of living to go up at the cost of american citizens? Or worse, her and the other elites of both countries want their individual standards of living to go up at the cost of the common people in both countries? Thinks start making a lot more sense to me when viewed like that. She already betrayed her parents who were stout republicans to become a democrate – being a double agent is nothing new for her.

    Reply

  2. Mike Norman Says:

    I guess the only positive takeaway from this is that Obama will screw things up so bad with his timidity and fiscal conservatism that it virtually guarantees Hillary won’t be elected President anytime soon. The bad news is, our next president could be a hardline fiscal conservative Republican like Congressman Paul Ryan or Eric Cantor. Both are rising stars within the Republican party. You might want to place a long-shot bet on Ron Paul. You’ll find bookies in Vegas or London who’ll take your money.

    Reply

  3. Dave Begotka Says:

    Mike believing in the Democrat, Republican stuff is like talking red and blue in the hood. Its all part of divide and conquer, become human!

    Reply

  4. vipul Says:

    Mike you’re right about a lot of things, but there is no way in hell Ryan or Cantor are president in 2012. FDR actually tried to cut spending in the middle of the Great Depression, helping to make it worse, and he got re-elected. The automatic stabilizers will be enough. Obama is there until 2016, you can bet on that.

    Reply

  5. manny valesco Says:

    Hoover had patton, mcarthur run tanks over the bonus army in washington DC. The nation did not forget, bush was hated, but I dont recall him running tanks over war heroes in the middle of the white house lawn. I don’t think Obama has the momentum you think he does. But as begotka keeps saying, it doesn’t matter, even if we send warren, the whole system is so farked, he will be corrupted too, why did the founding fathers flee instead of trying to change europe from the inside?

    Reply

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