How are your Chinese Language skills?
Economically speaking, China is the most powerful nation on earth and they are very near the point of financially owning the United States if they wanted to.
The US deficit is over $15 trillion. This is the largest national debt of any nation in the world today.
A third of the US debt is owned by our own federal government as Government Account securities. Most of these securities are owed to Social Security and various trust funds who at the time had surpluses.
The other two-thirds are considered to be public debt. The public debt is that owned by the American people, businesses and foreign governments in the form of Treasury bills, notes and bonds. If you own any of these, you own part of the US debt.
Of the $15 trillion of US debt, foreign countries own around $4.5 trillion (30%) of that debt. Of that $4.5 trillion own by other countries, China owns the largest piece at $1.1 trillion.
Add to this, the current trade deficit the US has with China which is now the largest trade deficit in the history of the world. According to January 2012 figures, the US is exporting $104 billion to China. However, China is exporting $400 billion to the US resulting in a trade deficit of $296 billion.
One person pointed out that the World Trade Center Twin Towers were torn down by foreign terrorists. They were considered to be the symbols of American economic dominance in the world. And the new symbol of economic world dominance can be seen by the fact that China is providing all of the glass for the new world trade center buildings being built in Manhattan.
China became a member of the World Trade Organization in 2001. In the ten years since that membership, the US trade deficit has increased by 18% per year. To give you an idea of how much our trade deficit with China has grown, consider the fact that it is 28 times larger today than when Ronald Reagan was president.
Tomorrow, Valentine’s Day, Chinese Vice President Xi Jinping will be at the White House to meet with President Obama. The topic of that meeting is expected by many to center on Tibet and trade.
With China holding the largest piece of America’s economy (debt and trade) than any other country, we are no longer in a position to make demands of them. Instead, Obama will be in a position to sit there and possibly make requests of the Chinese VP, but most likely he will sit there and listen to their demands and pray that they don’t call in their debt markers.
Wojtek Zarzycki, chief investment officer for Optimal Investing said,
“The Congress and the administration are too afraid to provoke China and do not sufficiently protect the American economy from the negative effects of Chinese economic policies. They have had several opportunities to officially name China a currency manipulator, but they have not.”
If Obama or the new Republican president to be elected in November don’t do anything to curb the current trend, we all may need to forget learning Spanish and turn to our language skills to learning Chinese because they will soon own our nation.