China worried about U.S. Treasuries

Bluegazer

Junior Member
Assalamu Alaikum,


Even though this piece of news may not be very relevant to the spread of Islam or other Islamic issues, I believe it will be beneficial for Muslims to know about such matters. It's part of increasing one's knowledge and knowing about issues affecting the world.


The following is from the New York Times newspaper website:

China’s Leader Says He Is ‘Worried’ Over U.S. Treasuries

By MICHAEL WINES, KEITH BRADSHER and MARK LANDLER
Published: March 13, 2009

BEIJING — The Chinese prime minister, Wen Jiabao, spoke in unusually blunt terms on Friday about the “safety” of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to offer assurances that the securities would maintain their value.

Speaking ahead of a meeting of finance ministers and bankers this weekend near London to lay the groundwork for next month’s Group of 20 summit meeting of the nations with the 20 largest economies, Mr. Wen said that he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.

As the financial crisis has unfolded, China has become increasingly vocal about what it perceives as Washington’s mismanagement of the global economy and financial system, joining a chorus of foreign critics of unbridled American capitalism. On Thursday, for example, France and Germany rebuffed American calls to coordinate a global stimulus package at the G-20 meeting, saying financial regulation should come first.

In January, Mr. Wen gave a speech criticizing what he called an “unsustainable model of development characterized by prolonged low savings and high consumption.” There was little doubt that he was referring to the United States.

Mr. Wen sounded similar themes in his remarks on Friday, which came in response to questions at a news conference at the end of the Chinese Parliament’s annual session. While refraining from direct criticism of the Obama administration’s economic policies, he reminded Washington of China’s status as its largest creditor. With budget deficits mounting rapidly, the United States needs China if it is to finance all that new debt at low interest rates.

“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”

He called on the United States to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.” What he did not mention was that Chinese investments in the United States helped drive the debt-fueled boom of the last decade, during which China grew increasingly dependent on the American market — a point that was driven home earlier this week when China reported a record 26 percent drop in exports in February.

He stopped short of any threat to reduce purchases of American bonds, much less sell any of them, underscoring the two countries’ mutual dependency.

Some specialists say that China’s investment in American debt is now so vast that it would be impossible for Beijing to unload its Treasury securities without flooding the market and driving down their price.

Still, it is rare for any world leader to raise questions about the safety of United States Treasuries. Both the White House and Treasury Department issued reassuring statements. Robert Gibbs, the White House press secretary, said, “There’s no safer investment in the world than in the United States.” Foreign investors would be reassured if Congress adopted the president’s budget plan, he said, because it would put “us on that path to fiscal responsibility.”

While economists dismiss the possibility of the United States defaulting on its obligations, they say China could face steep losses in the event of a sharp rise in United States interest rates or a plunge in the value of the dollar.

Mr. Wen praised China’s comparatively healthy economy and said his government would take whatever steps were needed to end the country’s slump. He also predicted that the world economy would improve in 2010.

His remarks appeared to have little immediate effect on financial markets. Many China experts said Mr. Wen appeared to be speaking as much to a domestic audience as to the United States. Other analysts interpreted Mr. Wen’s comments simply as a sign of irritation that the Obama administration had paid little attention to China in the planning for the G-20 conference. At the last such meeting in November, China’s president, Hu Jintao, spoke about the importance of listening to the voices of major developing economies in reforming the international financial system.

“The Chinese are peeved, legitimately, that the Americans have ignored them in the run-up to the G-20,” said Adam S. Posen, the deputy director of the Peterson Institute for International Economics. There may also be a bit of tit-for-tat for Treasury Secretary Timothy F. Geithner’s claim, in written Senate testimony, that China manipulated its currency, keeping it artificially low against the dollar.

Mr. Wen’s confident performance also underscored the growing financial and geopolitical importance of China, one of the few countries to retain enormous spending power despite slowing growth. It has the world’s largest reserves of foreign exchange, estimated at $2 trillion, the product of years of double-digit growth.

Economists say at least half of that money has been invested in United States Treasury notes and other government-backed debt, mostly bonds issued by the Treasury and government-sponsored enterprises, Fannie Mae and Freddie Mac.

Much of the Treasury debt China purchased in recent years carries a low interest rate and would plunge in value if interest rates were to rise sharply in the United States. Some financial experts have warned that measures taken to combat the financial crisis — running large budget deficits and expanding the money supply — may eventually lead to higher interest rates.

“The United States government is going to have to sell a huge amount of paper, and the market may react by demanding a higher interest rate,” said Nicholas R. Lardy, an expert in the Chinese economy at the Peterson Institute for International Economics. “This will force down the price of outstanding treasuries, imposing large paper losses on the Chinese.”

The conflicting financial currents pose a dilemma for Beijing. The smaller the United States stimulus, the less its borrowing, which could help prevent interest rates from rising. But less government spending in the United States could also mean a slower recovery for the American economy and reduced American demand for Chinese goods.

The sharp narrowing of China’s trade surplus with the United States may result in reduced Chinese purchases of American bonds in any case. By some accounts, China’s trade surplus could fall by as much as half this year, to around $155 billion. That would leave China with fewer dollars to buy foreign bonds, particularly as the pace of investment flows into China has also slowed sharply.

During her visit here last month, Secretary of State Hillary Rodham Clinton publicly assured China that its American holdings remained a reliable investment. But the sheer size of China’s holdings of American debt ensure that the countries’ partnership will endure, some analysts say. “The only possibility, really, is that China will have to hold these bonds until maturity,” said Shen Minggao, the chief economist at Caijing, a Beijing-based business magazine. “If you start to sell those bonds, the market may collapse.”

Michael Wines reported from Beijing, Keith Bradsher from Hong Kong, and Mark Landler from Washington.

Source: http://www.nytimes.com/2009/03/14/world/asia/14china.html


The United States has been under debt for many years. That's because it spends more than it earns from taxes and other sources of income. It finances this gap between its income and its expenditure by issuing U.S. Treasury Bonds. That means it is asking other entities to lend it money in exchange for returning the money with interest after a certain amount of time.

We Muslims know the ruling on interest [i.e., that is usury -pronounced in Arabic as Riba- and therefore prohibited in Islam].

What is striking about this topic is the following:

1- The size of the U.S. National Debt:

As of March 12, 2009, the "Total Public Debt Outstanding" is:

$ 10,983,549,928,728.74

Source: http://www.treasurydirect.gov/NP/BPDLogin?application=np


2- The largest lenders to the United States:

As in the article above, China has a "$1 trillion investment in American government debt, the world’s largest such holding".


3- That China (the largest lender to the United States) is actually worried about the U.S. being able to repay the debt:

As the article above noted:

The Chinese prime minister, Wen Jiabao, spoke in unusually blunt terms on Friday about the “safety” of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to offer assurances that the securities would maintain their value.

Speaking ahead of a meeting of finance ministers and bankers this weekend near London to lay the groundwork for next month’s Group of 20 summit meeting of the nations with the 20 largest economies, Mr. Wen said that he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.


And:

Mr. Wen sounded similar themes in his remarks on Friday, which came in response to questions at a news conference at the end of the Chinese Parliament’s annual session. While refraining from direct criticism of the Obama administration’s economic policies, he reminded Washington of China’s status as its largest creditor. With budget deficits mounting rapidly, the United States needs China if it is to finance all that new debt at low interest rates.

“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”

He called on the United States to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”


And:

, it is rare for any world leader to raise questions about the safety of United States Treasuries. Both the White House and Treasury Department issued reassuring statements. Robert Gibbs, the White House press secretary, said, “There’s no safer investment in the world than in the United States.”


I hope I have contributed to increasing public knowledge about this issue. I believe we are witnessing a shift in the center of power in the world, and China is certainly one of the new emerging powers.


Having said that, it is ultimately Allah who is the Almighty and the All Powerful, and therefore we Muslims should put our trust and hopes in Him alone. It doesn't mean that we should not have dealings with other countries, but we should always be mindful of the rights and obligations due to Allah the Almighty and always put these rights and obligations first.


Allah the Almighty said:

Say, "O Allah , Owner of Sovereignty, You give sovereignty to whom You will and You take sovereignty away from whom You will. You honor whom You will and You humble whom You will. In Your hand is [all] good. Indeed, You are over all things competent. You cause the night to enter the day, and You cause the day to enter the night; and You bring the living out of the dead, and You bring the dead out of the living. And You give provision to whom You will without account."

[Translation of the meanings of the Qur'an, 3:26-27]


Best regards,

Bluegazer
 

Bluegazer

Junior Member
By posting again, I hope this thread appears on the main index, since post #1 did not appear in the homepage of turntoislam.com
 

Hard Rock Moslem

I'm your brother
Yes you have increase my knowledge with fact and figures. I know US is the most debted country in the world but now only I'm seeing the figure. Thank you brother.
 

Bluegazer

Junior Member
Assalamu Alaikum [Peace be unto you],


I'd like to thank brothers HardRockMuslim and ayman1 for taking the time to read my post and contributing to this thread.

To HardRockMuslim: Thank you for your kind words, and I'm glad you benefited from my post.

To ayman1: I like the 'lose-lose situation' characterization! And about "China has no choice but to finance American debt because America is its largest market" -as you have stated-, there's another way others have described this situation; the "US / China symbiotic financial relationship". That's the title of a documentary shown on youtube.com:

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The following is some information about the television series in the video above and its presenter. It's from the New York Times newspaper website:

Following That Fast Cash

By NEIL GENZLINGER
Published: January 12, 2009

If high-finance types are as hyperactive as Niall Ferguson and his cinematographer show themselves to be in “The Ascent of Money,” it’s no wonder the world’s economy has crashed. Heed the fiscal warning signs? Can’t. Gotta rush headlong into the next investment trend.

Mr. Ferguson, the historian and best-selling author, moves at whirlwind speed in this two-hour documentary based on his recent book of the same title. The program, Tuesday on PBS, is dizzying, and not because it’s full of heady ideas. The camera work, with lots of the zooming and fast-motion tricks favored by filmmakers who fear their subject matter is intrinsically dull, comes close to inducing nausea.

A bit of motion sickness might be appropriate. Mr. Ferguson is all over the globe in this program: Memphis, Japan, Venice, Wall Street, Russia, South America, Chicago. But he generally doesn’t stay long enough in any one place to make more than a glancing point.

All of which renders “The Ascent of Money” somewhat frustrating. Mr. Ferguson is known for provocative theories and for an ability to render scholarly ideas in layman-friendly terms. Here he generally succeeds at the layman-friendly part, but the main theory isn’t provocative at all; it’s simply that all of what we have experienced lately — the housing bubble, the stock market plunge, the shady financial dealings — has happened before, and repeatedly.

No surprise there; virtually everything modern life can throw at us has historical precedents. Mr. Ferguson might have interesting thoughts on what specifically we can learn from the similarities between, say, the Enron debacle and John Law’s financial manipulations in France in the early 1700s, but we don’t get to hear them; he has already zipped off to the next location and topic.

If much remains elusive by the end of this program, Mr. Ferguson does at least leave you with something basic to ponder. Early on he notes that one simple idea allowed the human race to leap forward: “the idea that you could rely on people to borrow money from you and pay it back at some future date.”

On that basic concept, everything else — currency, credit, investment — rests. Yet by the program’s end, after Mr. Ferguson has introduced you to derivatives and all those other arcane financial instruments and practices, it becomes clear just how distorted that foundational idea — borrow money, pay it back — has become.

Source: http://www.nytimes.com/2009/01/13/arts/television/13pbs.html


Best regards,

Bluegazer
 

Bluegazer

Junior Member
Assalamu Alaikum [Peace be unto you],


The following is a follow-up of my first post, and it's from the New York Times newspaper website. Please take special note of the sections I set in bold type, like so:

Obama Reassures Countries on U.S. Debt


By PETER BAKER and ALEXEI BARRIONUEVO
Published: March 14, 2009


WASHINGTON — President Obama reassured China and other countries on Saturday that their investments in United States government debt were safe as he seeks to finance record deficit spending to pull the American economy out of its deep recession.

“There’s a reason why even in the midst of this economic crisis, you’ve seen actual increases in investment flows here into the United States,” Mr. Obama told reporters. “I think it’s a recognition that the stability not only of our economic system but our political system is extraordinary.”

He added, “Not just the Chinese government, but every investor can have absolute confidence in the soundness of investments in the United States.”

Mr. Obama’s comments came a day after China’s prime minister, Wen Jiabao, expressed worries about the safety of Beijing’s $1 trillion investment in American debt. Mr. Obama needs foreign investors to finance a projected $1.75 trillion budget deficit this year, pumped up by stimulus spending and bank bailouts, and none is more critical than China, the largest overseas holder of United States government bonds.

Mr. Obama offered his assurances after a meeting with Brazil’s president, Luiz Inácio Lula da Silva. They discussed energy cooperation and the economic crisis, trying to coordinate ideas before upcoming summit meetings.

Mr. da Silva pressed Mr. Obama to help reopen global trade talks known as the Doha Round and to lower tariffs that keep Brazilian biofuels out of the American market. Mr. Obama said they had a “wonderful meeting of the minds” and expressed interest in making progress on trade, but he indicated no tariff changes were afoot anytime soon.

Mr. da Silva’s early visit to the White House suggested that Mr. Obama planned to pick up where President George W. Bush left off in trying to make Brazil a key to United States policy in Latin America. David Fleischer, a political science professor at the University of Brasília, said the meeting “reinforces Brazil’s growing leadership in the region.”

Mr. da Silva has been a leading voice in urging the United States to moderate its dealings in Latin America.

He has also made a point of linking himself with Mr. Obama, citing similarities between their origins and the challenges they overcame to lead their countries. Sitting next to him in the Oval Office, Mr. da Silva said he prayed more for Mr. Obama than he did for himself and, with all the troubles confronting him, would not want to be in the American president’s shoes.

Mr. Obama smiled and replied, “You sound like you’ve been talking to my wife.”

Peter Baker reported from Washington, and Alexei Barrionuevo from São Paulo, Brazil.

Source: http://www.nytimes.com/2009/03/15/us/politics/15prexy.html?hp


Best regards,

Bluegazer
 

Optimist

قل هو الله أحد
Thank you brother bluegazer for these articles.

There is so much being said about US/China symbiotic relationship. I don't think this is true. China are the haves and the US are the have nots. The only reason this relationship persist because it would be less of a loss (i.e. not a win) for China to continue propping up the US with her money. This cannot go on for ever. The patience of the Chinese is clearly wearing thin. You can refinance your mortgage that many times. If you don't start to pay back, the bank will come and take your house.
 
The US dollar, and all fiat currency for that matter is practically worthless. Had to happen after the abandonment of the gold standard. The rise in the price of gold is good evidence. The only real money is gold and silver and any investor thinking that debt is a good thing is in for a rude awakening similar to the awakening caused by the global economic crisis.

China has no choice but to finance American debt because America is its largest market. To paraphrase a famous quote, it's a lose-lose situation :D


Salaam,

It's true. The economist Adam Smith once said that value is in the mind. We put value in the paper dollar. However paper dollar has no intrinsic value, like gold and silver. It's worth mentioning that sense gold & silver are scarce resources in the world, it could potentially escalate wars.

It's tough to create a sound money system. In the U.S. however, the first change should be to hand over the control of printing from the private Federal Reserve cartel back to the hands of it's government. The income tax & interest would be abolished if this ever occurred.
 

Bluegazer

Junior Member
Assalamu Alaikum [Peace be unto you],


And the reassurances from U.S. officials keep coming:

Page last updated at 09:23 GMT, Monday, 1 June 2009 10:23 UK

Geithner assures China investors

US Treasury Secretary Timothy Geithner has told the Chinese government its investments in the US are "very safe", despite a growing budget deficit.

Mr Geithner is on his first official visit to China, the biggest foreign investor in US treasury bonds.

Ahead of meetings with President Hu Jintao and Premier Wen Jiabao, he said the US and China must work together to fix the global economic system.

Mr Geithner said the US would move swiftly to get its debt under control.

In a speech at Beijing University at the start of his two-day visit, Mr Geithner reassured his Chinese hosts that they need not worry about the estimated $770bn (£475bn) they have invested in US treasuries, a class of US government debt.

"Chinese financial assets are very safe," he said, drawing laughter from the audience.

He will be hoping that China's president and premier take his reassurance more seriously, because America needs China's confidence, and its money, says the BBC's Quentin Sommerville in Beijing.

'Better shape'

Mr Geithner said the global recession was losing force, and the world's financial system was starting to heal.

"We are seeing more durable stability in the economy and the financial system is in substantially better shape," he said.

"But we have a ways to go and we need to keep working in the United States and with the other major economies to restore conditions for a sustainable recovery," he said.

He made only the briefest reference to a topic of sharp disagreement - China's currency. America says it is undervalued, making Chinese exports cheaper and costing US jobs.

But he did not push the point too hard, perhaps because, as he said, global problems would not be solved without the US and China working together, our correspondent says.

Source: http://news.bbc.co.uk/2/hi/asia-pacific/8076642.stm


Best regards,

Bluegazer
 

Bluegazer

Junior Member
Assalamu Alaikum [Peace be upon you],


I hope all of you are all right and in good health. It's been a while since I posted anything.

In keeping with the theme of U.S. Treasury Bonds, I think many of you already know about the debate that happened this summer in the U.S. Congress about raising the debt ceiling of the U.S. government. Basically, in order to pay off the debt of Treasury bonds that have matured (i.e., the date of repayment has arrived) and to pay the interest rates, the U.S. government needs to borrow more money in order to pay these outstanding amounts. Therefore, the debt ceiling (the total amount of money the government is allowed to borrow) must be raised by Congress. In the past, this was a routine vote that passed without any problems with Republican and Democrat Presidents and with Republican and Democrat controlled Legislatures.

However, the Tea Party wing of the Republican Party started to send signals that it may not agree to raise the debt ceiling, and since the Republicans control one of the Houses of Congress (the House of Representatives), there was talk about the U.S. Government defaulting on its debt.

In the end, heated negotiations resulted in an agreement to raise the debt ceiling and so default was avoided.

However, a rating agency called S&P (Standard and Poor's) decided to downgrade U.S. Government bonds from an AAA rating to AA+.

The following are two articles from the BBC website basically confirming what I've written above.

3 August 2011 Last updated at 03:41 GMT

US avoids default as Obama signs debt bill into law


President Barack Obama has signed legislation to increase the US debt ceiling and avert a financial default, after Congress voted in favour of a bipartisan compromise deal.

The bill cleared its final hurdle in the Senate by 74 votes to 26, after negotiations went down to the wire.

It raises the debt limit by up to $2.4tn (£1.5tn) from $14.3tn, and makes savings of at least $2.1tn in 10 years.

But the bill's passage failed to lift financial markets.

On Wall Street stocks ended Tuesday down by more than 2%, amid poor consumer spending data for June.

Japan's Nikkei index followed suit, finishing Wednesday morning down by about the same amount.

Moody's rating agency reacted to the bill by placing Washington's AAA credit score under a "negative outlook". Chinese credit agency Dagong downgraded its rating of the US from A+ to A, Xinhua news agency reported.

The bill's signing came just 10 hours before the expiry of a deadline for Washington to raise its borrowing limit, after drawn-out talks between Republicans, Democrats and the White House.

Without a deal to raise the debt ceiling, the US would have been unable to meet all its bills, the treasury department had warned.

Speaking at the White House shortly after the decisive vote in the Senate, President Obama said it was "pretty likely that the uncertainty surrounding the raising of the debt ceiling for businesses and consumers has been unsettling".

"It's something we could have avoided entirely," he added.

The president said more action was needed, saying it was impossible for the US to "close the deficit with just spending cuts".

He urged Congress to now look to boost the economy through measures to create jobs and increase consumer confidence.

"We can't balance the budget on the backs of the very people who have borne the biggest brunt of this recession," President Obama said, reprising one of his key themes of recent weeks.


Lawmakers lament

In Tuesday's Senate vote, the bill was opposed by six Democrats and 19 Republicans.

Some Democratic and Republican lawmakers have bitterly opposed the legislation in recent days, saying it offered too much of their opponents' agenda.

But the legislation still received many of their votes in the House and Senate as lawmakers heeded warnings that the US would default on its debts if Congress did nothing.

"This is a time for us to make tough choices as compared to kick the can down the road one more time," Republican Senator Jerry Moran said following the vote.

Speaking after the vote in the Senate, Democratic majority leader Harry Reid echoed the discontent of some in Congress, saying "neither side got all it wanted, each side laments what it didn't get".

"Today, we made sure that America will pay its bills, now it's time to make sure all Americans can pay theirs," Mr Reid added.

Before the bill's passage, Senate Republican leader Mitch McConnell praised the outcome, saying: "Together, we have a new way of doing business in Washington."

The legislation passed in the House of Representatives by a clear majority on Monday evening.


Triggers in place

The compromise package deeply angered both right-wing Republicans and left-wing Democrats.

Liberals have been unhappy that the bill relies on spending cuts only and does not include tax rises for the wealthy, although Mr Obama could still let Bush-era tax cuts for the top brackets expire in January 2013.

House Republicans were displeased that the bill did not include more savings.

In a key point for President Obama, the bill raises the debt ceiling into 2013 - meaning he will not face another congressional showdown on spending in the middle of his re-election campaign next year.

The deal will enact more than $900bn in cuts over the next 10 years.

It will also establish a 12-member, bipartisan House-Senate committee charged with producing up to $1.5tn of additional deficit cuts over a decade.

Analysts have said the cuts will probably come from programmes like federal retirement benefits, farm subsidies, Medicare and Medicaid.

Economists have said that failure to pass the debt deal would have shaken markets around the globe.

Source: http://www.bbc.co.uk/news/world-us-canada-14379240


6 August 2011 Last updated at 08:38 GMT

US loses AAA credit rating after S&P downgrade

One of the world's leading credit rating agencies, Standard & Poor's, has downgraded the United States' top-notch AAA rating for the first time ever.

S&P cut the long-term US rating by one notch to AA+ with a negative outlook, citing concerns about budget deficits.

The agency said the deficit reduction plan passed by the US Congress on Tuesday did not go far enough.

Correspondents say the downgrade could erode investors' confidence in the world's largest economy.

It is already struggling with huge debts, unemployment of 9.1% and fears of a possible double-dip recession.

The downgrade is a major embarrassment for the administration of President Barack Obama and could raise the cost of US government borrowing.

This in turn could trickle down to higher interest rates for local governments and individuals.

However, some analysts said with debt woes across much of the developed world, US debt remained an attractive option for investors.

The other two major credit rating agencies, Moody's and Fitch, said on Friday night they had no immediate plans to follow S&P in taking the US off their lists of risk-free borrowers.


'Flawed judgement'

Officials in Washington told US media that the agency's sums were deeply flawed.

Unnamed sources were quoted as saying that a treasury official had spotted a $2 trillion [£1.2 trillion] mistake in the agency's analysis.

"A judgment flawed by a $2tn error speaks for itself," a US treasury department spokesman said of the S&P analysis. He did not offer any immediate explanation.

John Chambers, chairman of S&P's sovereign ratings committee, told CNN that the US could have averted a downgrade if it had resolved its congressional stalemate earlier.

"The first thing it could have done is raise the debt ceiling in a timely manner so the debate would have been avoided to begin with," he said.

International reaction to the S&P move has been mixed.

China, the world's largest holder of US debt, had "every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," said a commentary in the official Xinhua news agency.

"International supervision over the issue of US dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country," the commentary said.

However, officials in Japan, South Korea and Australia have urged a calm response to the downgrade.

The S&P announcement comes after a week of turmoil on global stock markets, partly triggered by fears over the US economy's recovery and the eurozone crisis.

Source: http://www.bbc.co.uk/news/world-us-canada-14428930


The above background information is important in order to fully understand and appreciate what I'm going to say next.

Alan Greenspan was appointed Chairman of the Board of Governors of the Federal Reserve System in 1987. He stayed in this position until 2006. The following is from the official website of the Board of Governors of the Federal Reserve System. I highlighted a certain line, like so:


Chairmen Date of term
Charles S. Hamlin Aug. 10, 1914-Aug. 9, 1916
W.P.G. Harding Aug. 10, 1916-Aug. 9, 1922
Daniel R. Crissinger May 1, 1923-Sept. 15, 1927
Roy A. Young Oct. 4, 1927-Aug. 31, 1930
Eugene Meyer Sept. 16, 1930-May 10, 1933
Eugene R. Black May 19, 1933-Aug. 15, 1934
Marriner S. Eccles Nov. 15, 1934-Jan. 31, 1948 1
Thomas B. McCabe Apr. 15, 1948-Mar. 31, 1951
Wm. McC. Martin, Jr Apr. 2, 1951-Jan. 31, 1970
Arthur F. Burns Feb. 1, 1970-Jan. 31, 1978 2
G. William Miller Mar. 8, 1978-Aug. 6, 1979
Paul A. Volcker Aug. 6, 1979-Aug. 11, 1987
Alan Greenspan Aug. 11, 1987-Jan. 31, 2006 3
Ben S. Bernanke Feb. 1, 2006-

Source: http://www.federalreserve.gov/bios/boardmembership.htm#chairmen


On Sunday, the 7th of August 2011, Alan Greenspan was interviewed (along with others) on NBC's program Meet the Press. Here's what he said, and please concentrate on what he said from 0:45 to 1:08.

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Source: http://www.youtube.com/watch?v=eEKhxdeadk0



What do you think of his answer ??!!



Let's just say I was really surprised at how honest and blunt he was.
 

Aapa

Mirajmom
Assalaam walaikum,

Oh how good it is to see you post. Please keep posting with your intellectual and thought provoking comments.


Now to the topic: Duplicity; duplicity, duplicity. Print a barrel of money and I might be able to buy a loaf of bread.

Israel is the only country in the world that mints its coins. We have toilet tissue.
Pakistan is the key to China, always has been and always will be.

Funny how things connect isn't it.
 

Bluegazer

Junior Member
Thank you sister Mirajmom for your kind comments and your insight.


And just to make sure Greenspan's comment stays with us, the following is from the CNBC website about the interview I mentioned at the end of post #11. I highlighted certain parts, like so:

No Chance of Default, US Can Print Money: Greenspan

Published: Sunday, 7 Aug 2011 | 3:15 PM ET
By: Patrick Allen
CNBC EMEA Head of News

Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P's decision to downgrade America's credit rating.

"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default" said Greenspan on NBC's Meet the Press

"What I think the S&P thing did was to hit a nerve that there's something basically bad going on, and it's hit the self-esteem of the United States, the psyche" said Greenspan

Austan Goolsbee, the chairman of the White House's council of economic advisors, hit out at S&P on the same show, insisting the credit ratings agency had got its math wrong.

"Well, the basic case is they made a $2 trillion math error and forgot to check their work," he said. "So rating agencies that didn't make a $2 trillion math error reaffirmed the AAA status. You saw Warren Buffet say that, if they had a AAAA, he would put U.S. Treasurys in AAAA status."

Following the decision to downgrade America's credit rating, the head of sovereign ratings at S&P, David Beers, said the Obama administrations analysis of the move was a complete "misrepresentation."

Greenspan said the current sense of crisis that has unnerved investors is about the euro zone, not the US.

'The United States was actually doing relatively well, sluggish but going forward until Italy ran into trouble," he said. "That destabilized the European system, and the crisis re-emerged. Europe is very critical to the United States in the sense not only do we have a fourth of our exports there, but more importantly, significant proportion of the foreign affiliate profits, in fact half of U.S. corporations, are in Europe."

"When Italy showed signs of significant weakness in selling its bonds—the yield is now over 6 percent, which is an unsustainable level—it created a massive problem within Europe because Italy is a very large country, cannot be easily bailed out and, indeed, cannot be bailed out," Greenspan added.

Source: http://www.cnbc.com/id/44051683/No_Chance_of_Default_US_Can_Print_Money_Greenspan
 

sabina isa

Junior Member
Thank you sister Mirajmom for your kind comments and your insight.


And just to make sure Greenspan's comment stays with us, the following is from the CNBC website about the interview I mentioned at the end of post #11. I highlighted certain parts, like so:



Source: http://www.cnbc.com/id/44051683/No_Chance_of_Default_US_Can_Print_Money_Greenspan

As salam alaikum,

So publicly is accepted that "printing the money" is paying the debt?!!!! This is grosss!

We salam
 
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