China Looking For Guarantees On Debt

This is a bad story for the US economy.  China now realizes that the US strategy is getting a little bit out of control.  Inflating our way out of the mess is a good strategy as long as China is willing to loan us the money. This story is one of the first indications that China is starting to get a bit antsy with US antics.  Geitner had words over the Yuan, but that seemed to have gone away.

Today there is a government official of China talking about our reckless policies. We obviously will not give them guarantees other than “we promise”. Will that be enough?  Watch interest rates.  If rates start to spike, Game OVER.  We might have to guarantee them the right to future revenue flows - tax payments from US citizens.  You’ll know it’s over when the US government tells you to make your income tax payable to the Peoples Republic Of China. Oh yeah, it will be due by March 1st, not April 15th too LOL.

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