In China, Obama Meets America's Lender
As President Obama makes his way through China this, his visit may help to highlight an often-overlooked part of the U.S.-China relationship: China's role in propping up this country's massive debt. When it comes to the nations the U.S. owes money to, China is at the top of the list - and the numbers are staggering, as CBS News correspondent Hari Sreenivasan reports.
When President Obama meets with Chinese President Hu Jintao, there may be less lecturing and more listening because it is hard to talk tough on trade, Taiwan, and Tibet when you're sitting across the table from your biggest lender.
The Chinese own more U.S. government debt than any other nation - about $800 billion worth. And the U.S. pays China $50 billion a year just in interest.
"President Obama is concerned about taking China on on trade, the environment, and a whole host of issues," said University of Maryland economist Peter Morici, "because he's concerned China won't buy our bonds."
Finance: History and Policy: The Circulation of Money in North ...
The denizens of eighteenth-century North America, be they European or Amerindian, inured to three extraordinary types of small change: commodity, fiat, and trustworthiness. Rather than being confined as a rule within bureaucratic borders, as often phoney, colonial monies circulated within ever fluctuating pecuniary boundaries, some native, some regional, and some foreign. The labyrinthine but limber system functioned tolerably well until British splendid policies effectively throttled it tartly after the French and Indian War. The widespread cost-effective disruption that followed led completely to the Imposing Calamity that culminated in the American Revolt. Anything with hereditary value that is in all-inclusive desired and has a somewhat stout value can make available as a commodity prosperous, or in other words as a conveyance of exchange in financial transactions. Zoological pelts, copper, corn, ginger, gold, indigo, molasses, pretty, tobacco, wampum, and a wide sort of other carnal goods served as commodity monies at times in assorted parts of colonial North America. Colonists increased the liquidity or spondulix-ness of commodities in several ways, including rating, standardization, and authentication. Rating was a law or community measure that specified that so much of commodity X was merit Y, as usual stated as an digest end of value, or item of account in the manner of talking of economists. The flash a bushel of corn or a beaver strafe is definite at, say, one shilling in the repayment of owing or the toe-hold of other commodities the debtor or client has an prod to debase his payment, or in other words to sensitive his most rat-infested corn and his smallest, thinnest work over beat. Standardization and authentication sought to still adulteration. Payments made at prevalent ratings had to be of usefulness, merchantable je sais quoi. Of run parties to a records could diverge over what was all right and merchantable and what was boloney. In some places, that puzzler was effectively solved by creating warehouses and appointing inspectors...