China Steps into the Debt Ceiling Fiasco

And rightfully they should, being our largest creditor:

The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking” and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.

“We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,” Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,” he added.

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  • Mike_Norris

    Do the Republicans understand at all what is happening here? The United States is now being lectured to and schooled by the Chinese on how to manage money. Mint the coin Mr. President and take the power back from these ignorant hillbillies before they really do train wreck the world economy.

  • http://phydeauxpseaks.blogspot.com/ Bob Rutledge

    Because being called out by the Commie Chinese won’t make the GOPTP more recalcitrant.

    “Hey, y’uns, if’n we deefault on are dets, we can fuck the Chinks up big time!”

    • http://drangedinaz.wordpress.com/ IrishGrrrl

      That was exactly my thought too.

  • trgahan

    Yet, in the far right bubble, Republican obstruction at home hurting China is likely seen as a happy side effect.

    I honestly am beginning to believe that last week’s mail bag had it right: nothing will change unless someone in a top floor Wall Street and/or Houston, TX corner office picks up the phone and tells the GOP to cut it out because it will start adversely affecting the people paying for their campaigns.

    Until that time, everything else can burn to the ground.

    • mdblanche

      My big fear is that even that won’t stop them now.

    • blair houghton

      Those guys are all hip-deep in Put options and short stock.

      They are absolutely counting on the default and the massive market crash that will follow a downgrade of American debt to junk status.

      They’ll think about the rest of us after they’ve closed out, when the economy bottoms.

      • trgahan

        Very good point.

        Indeed there are probably many people with little American Flag lapel pins salivating at the opportunity for American Federal Government bonds to be designated “junk.” However, for every d-bag playing the “short” game there are five guys (however indirectly) he’s trying to short and those guys don’t tolerate their principle being threatened in such ways. One of the principle reasons conservative politics since 2009 in Europe and the US has focused on “austerity” is to protect the oligarchies bond investments from their only true threat: inflation.

        Not saying either group really gives a shit about you or I, but for even the rigged system of Wall Street to work, the core wealth has to play it straight.

        • blair houghton

          No, Wall Street is in on this, and they’re ultra-short, too. The only person behind the 8-ball is you, the retail investor, whose cash is backing their risk. They keep your money in their dumpy mutual fund or your stupid stock portfolio picks, then they short their own accounts or buy massive Puts against anyone who will front them (they just dangle the price in front of the book and whoever wants it fills it; and they accept the risk and know they can be vaporized in an instant; that’s the rules of the game).

          You think the London Whale had any juice at all? No. The rest of the sharks were happy to wind him around his own axle and watch him pop like a balloon when the market dropped on him.

          Today the House met to actually discuss the “crisis”, which buoyed the market. But when they’re not doing pro-forma pony shows for you, they’re sending coded messages to their unlisted brokers and you’re getting lined up for another paddling.

  • LTanya Spearman

    ‘THIS REAL JOURNALISM’
    Carl Bernstein – Slam Media’s ’50/50′ Shutdown Coverage
    http://wwwyoutube.com/watch?v=596TPv9Ucic

    Fareed Zakaria – Government Shutdown ‘Extortion’

    http://watch?v=g2Byro1Ji3k

    (MUST WATCH)

  • BlueTrooth

    I mentioned Libertarian levers of power yesterday…there’s another BIG problem here. The Biblethumpers have a whole lot of cash. About 2 years ago I put together some research and they’ve grown even larger. The largest organizations use “Pro-life” as their primary “hook” for donations. They track EVERY vote related to relevant issues and yes, “Debt” is a relevant issue. They finance candidates. They message EVERY Senator and Representative with “auto sign” petitions, etc. The reason this group is particularly scary is they are quite happy to see the debt to China go unpaid. Many of them are End Timers and/or Dominionists. A few days ago I was tweeting a little about the Island of Misfit TeaPartiers. The GOP is overrun with misfits. They were on the ropes and their last gasp effort has been to embrace the looniest of their Party because the loons stuck around. They literally had no place to go. Well, they DID…it was a fledgling party called the Tea Party. So they co-oped the Tea Party and that is what the Republican Party has become. There are some straggling “real Republicans” but they’re worthless. they can’t act on their principles or pragmatism. They can only take orders from the Misfits.

  • MrDHalen

    The dollar is the worlds reserve currency, which means we are required to run a debt. China uses US dollars to buy goods from other nations. The whole world uses our money to shop around the world. That can’t happen if we don’t allow other nations to hold dollars.

    Think about that next time you see someone screaming about the our debt. Our dept is high, but we will have debt being the world’s reserve currency.

    • blair houghton

      The dollar stopped being the world’s currency when the Euro matured. Now many currencies are fungible, and even petrodollars, which aren’t the same as US dollars, don’t mean much any more. The only way to make the US dollar important is to reverse the trade imbalance and make us a net exporter again, making everyone else have to get dollars to pay us for stuff we make. And all of that is not significant to our debt situation. The currency it’s denominated in is way down the list of things that will be screwed if America starts to default on its obligations.

      • Badgerite

        One thing is for sure. America will be screwed.

    • http://drangedinaz.wordpress.com/ IrishGrrrl

      I don’t understand a lot of the details BUT I do know that experts like KThug are saying that Treasury Bonds are the world’s safest asset and the loss of that safety has huge implications, both immediate and down the line. I think, from my very ill informed position, that that is the key to it all.

    • Badgerite

      I fear the whole world will rethink that reliance on American economic stability after the GOP ‘business’ people get done with their antics.

  • Badgerite

    I think the President Obama has to now be prepared for the possibility that these a—holes plan to take the country over the cliff. It is not just a bluff. In which case he needs to be prepared to act and act decisively to prevent default. And I do not mean ‘compromise’ or ‘negotiate’. I mean use the power of the executive to prevent it and deal with their impeachment threats later. I think they are positively daring him to do that. And then, not having ‘Obamacare’ to scream about come mid terms, they will have their ‘impeachment’ issue. I think some bloggers have pointed out that that probably is the Republican end game here. This is not about the budget, which is improving. Or the economy, which was improving til they got their mitts on it. This is about their usual ‘unless we control everything and you do what we say, we are going to make a mess’ strategy of governance.

  • Badgerite

    Maybe they need some Jesse Pinkman up on the Hill. “Yo. Bitches. Are you gonna do this or do we have to do this for you”?

  • Mike_Norris

    I just saw this on WP.com: I say Do it! God damn–Do it. The senate could really look like heroes here.

    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/08/wonkbook-can-the-senate-save-the-country-from-default/

  • Runt

    Oh, great! Now Republicans will claim that raising the debt limit is communism, and that Obama is worse than Mao.

  • feloniousgrammar

    Republicans hate Obama, Democrats, and liberals so much that they don’t care who insults him or the U.S. as long as they feel superior to the black man in the Oval Office.