Creditor China Wanting Debtor America to Kowtow

The Chinese invented the word kowtow. Now that they own a disproportional amount of US debt, they are starting let them know that they have a say in operations:

China may voice its concerns over U.S. government finances and the potential for a weaker dollar when Secretary of State Hillary Clinton visits China on Feb. 20, according to He Zhicheng, an economist at Agricultural Bank of China, the nation’s third-largest lender by assets. A People’s Bank of China official, who didn’t wish to be identified, declined to comment on the telephone.

“In talks with Clinton, China will ask for a guarantee that the U.S. will support the dollar’s exchange rate and make sure China’s dollar-denominated assets are safe,” said He in Beijing. “That would be one of the prerequisites for more purchases.”

(...)

“The biggest concern for China to continue buying U.S. Treasuries is that if Obama’s stimulus doesn’t work out as expected, the Fed may have to print money to cover the deficit,” said Shen Jianguang, a Hong Kong-based economist at China International Capital Corp., partly owned by Morgan Stanley. “That will cause a dollar slump.”

The big problem with the average American was that they weren't saving any money and they were over extended on credit. Joe Six Pack had a McMansion, Cherokee and BMW in the driveway. It's a microcosm of what the US government is doing. Instead of cutting up the credit card they are going on the biggest borrowing spree in history.

Watch as those US Treasury securities that the Chinese have go toxic. Imagine if the US have to default?