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Originally Posted by Kaefer
Yup! That is a concern. The flip side of that coin is that they are investing in dollars because they know (or at least feel strongly) that they'll get their money back and then some. Let's face it, if not China, somebody else would be buying our bonds. Congress just passed an ammendment to balance the budget; hopefully, they'll actually honor it.
Juan
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As you pointed out, investing in US debt is fairly safe and provides a good return. But at some point they'll need to diversify their investment more than current levels. China is already pumping big money into Africa and South America to feed their resource needs and because they can exert more influence there than in the US.
Japan and China will own over 1.6 Trillion in US debt. That's a lot of slack for other countries to take up should they diversify their investments into other countries instead of the US.
02-15-2006, 01:43 PM
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