THE CHINESE THREAT AND OUR COMMON ECONOMIC DESTINY

Joseph Smith said that if we do not deal carefully with the "heathen Chinese",  we will have to deal with them on the lands beyond which we would be driven as a people (the Rocky Mountains).  Right now, we are not dealing very carefully with them and they are making bold threats against us - telling us how to deal with our internal affairs.  I do not fault them for this.  One thing about the Asian culture is that they love their money.  If you want to lose a friend quickly who is Asian, come up short on money that you owe them.

Well, we are broke as a nation (by design) - and the Asians will not be happy if we default on the money we owe them.  Once they have nothing to lose (in our symbiotic trade deals), then we can expect them to be angry.  When Joseph made that statement, there was no way China could match our military might or sophistication.  Now - this would not be so.  They are currently doing joint military exercises with the Russians - and they are not defensive operations.  All joint military operations are offensive.  Joel Skousen had that one correct - at least, though his timing was off.  China, nor Russia need a massive military machine to do what they are going to do.  What they do need is a disarmed populace and an infiltrated military or a complicit Commander in Chief (yes, it was hard for me to use caps and to type that out thinking of bummer being in that role.....).

Get your fiscal house in order: China warns US as superpower expresses concern for $1.3tn of investments

'Clock is ticking', says Chinese minister, as US fails to break deadlock over government shutdown and fast-approaching ‘debt ceiling’ deadline

China, the biggest foreign creditor of the United States, has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay.

The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking” and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October.
“We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,”  Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,” he added.
The American government entered its seventh day of shutdown on Monday, following the failure of Congress to approve the national budget a week ago. And there was little sign of progress on the still more crucial issue of the fast-approaching “debt ceiling”  deadline. Yet rather than indicating  a willingness to negotiate, the Republican Speaker of the House of Representatives, John Boehner, stated on Sunday that it was “time for us to stand and fight” over the budget. He added that a default was “the path we’re on”. American stock markets opened down in response to the belligerent comments yesterday, with the S&P 500 Index of leading shares shedding 0.5 per cent.
In September 2008 China eclipsed Japan to become the biggest single foreign creditor of the US federal government. The US administration estimates that the China government holds at least $1.3 trillion of its bonds. The total could be higher because Beijing is known to hold American debt through intermediaries. And, in total, the Beijing authorities have $3.5trn of dollar-denominated assets, which would also be hit hard in the event of a default.
These vast foreign exchange holdings are a by-product of China’s closed financial system and persistent current account surplus, which means that most foreign currency that enters the country accumulates with the central bank. The central bank then invests the money in normally “safe” dollar assets. The vast dollar reserves are also a legacy of China’s policy in recent decades of artificially holding down the value of its currency, the renminbi, in order to boost the overseas sales of its politically influential export industry.
However, economists have criticised the popular idea that China could exert political or economic leverage over Washington by threatening to sell its dollar investments, since such a drastic shift would ultimately serve to undermine the paper value of Beijing’s own vast investment portfolio. Nevertheless, China’s creditor position and its status as the world’s second largest economy gives its voice some authority in Washington and Mr Zhu made it clear that private representations had already been made. “The US is clearly aware of China’s concerns about the financial stalemate and China’s request for the US to ensure the safety of Chinese investments,” he said yesterday.
Since the global financial crisis, which led to a sharp depreciation in the value of the dollar against the renminbi, the authorities in Beijing have been concerned about the fact that so much of their national reserves are held in the form of the American currency. China has been promoting the idea of a new reserve currency to replace the greenback, with some analysts suggesting that the renminbi could one day take its place.
Mr Zhu stressed that it was vital, not only for China but the wider global economy, for America to resolve its budget impasse. “Safeguarding the debt is of vital importance to the economy of the US and the world,” he said. Referring to a similar deadlock in 2011, which led to a downgrade of the US AAA credit rating by the Standard & Poor’s agency, Mr Zhu said: “We hope the United States fully understands the lessons of history.”
The concerns over the stability of the dollar come at a time of geo-political flux. Barack Obama has sought to “pivot” his foreign policy to Asia to counter China’s growing military influence. But the shutdown has forced the US President to cancel his visit to Asia this week to attend a summit.