MidnightCall Magazine
In this issue:
- Hear theWord of the Lord — By Thomas Lieth
- FirstThessalonians 3 and the Rapture — By Dr. Ron J. Bigalke Jr.
- Popular Prophecy:CheckingDogmaTwice — By Wilfred Hahn
News From Israel MagazineIn this issue:
- Why Jerusalem is Jewish — By Arno Froese
- ON THE HORIZON:
- Analysis: Birthright Needs to Transform on Larger Scale
- Israel Praises Turkish Authority for Preventing Hezbollah Attack
- Relationship with American Jews Is Changing
- A Festival of Discrimination—Funded by the EU
- The Cyrus Cylinder
China Slows Purchase of U.S. and Other Bonds
Reversing its role as the world’s fastest-growing buyer of United States Treasuries and other foreign bonds, the Chinese government actually sold bonds heavily in January and February before resuming purchases in March, according to data released by China’s central bank.
China’s foreign reserves grew in the first quarter of this year at the slowest pace in nearly eight years, edging up $7.7 billion, compared with a record increase of $153.9 billion in the same quarter last year.
China has lent vast sums to the United States — roughly two-thirds of the central bank’s $1.95 trillion in foreign reserves are believed to be in American securities. But the Chinese government now finances a dwindling percentage of new American mortgages and government borrowing.
Asked about the balance of financial power between China and the United States, one of the Chinese government’s top monetary economists, Yu Yongding, replied that “I think it’s mainly in favor of the United States.”
He cited a saying attributed to John Maynard Keynes: “If you owe your bank manager a thousand pounds, you are at his mercy. If you owe him a million pounds, he is at your mercy.”
The main worry of Chinese officials has been that American efforts to fight the current economic downturn will result in inflation and erode the value of American bonds, Chinese economists said in interviews in Beijing.
“They are quite nervous about the purchasing power of fixed-income assets,” said Yu Qiao, an economics professor at Tsinghua University.
Economists said there was no sign that the Chinese government had deliberately throttled back its purchases of overseas bonds to punish the United States for pursuing monetary and fiscal policies aimed at stimulating the American economy.
China’s reserves have soared in recent years as the People’s Bank bought dollars on a huge scale to prevent China’s currency from appreciating as money poured into the country from trade surpluses and heavy foreign investment. But China’s trade surpluses have narrowed slightly as exports have fallen, while foreign investment has slowed as multinationals have conserved their cash.
Some economists contend that slower growth in Chinese foreign currency reserves is not important to the economic health of the United States, even though it may be politically important. In the first quarter, instead of the Chinese government sending money out of the country to buy foreign bonds, Chinese individuals and companies were buying many of the same bonds.
Heavy purchases of Hong Kong dollars by mainland Chinese residents early this year also have the indirect effect of helping the United States borrow money. The Hong Kong government pegs its currency to the American dollar, and stepped up its purchases of Treasury bonds this winter in response to strong demand for Hong Kong dollars.
www.nytimes.com, 13 April 2009
Something is happening that was unthinkable several decades ago. Communism, the most despised, even hated political philosophy to Americans, has become the backbone of America’s financial and economic structure. The freewheeling, no limits, no regulation, get-rich-quick philosophy bubble has burst. In plain words, capitalist America depends on communist China’s money. Therewith, the world is being inseparably glued together. That’s only the beginning.
Based on Bible prophecy, the world must become one in order to function as a global economy controlled by global financial laws, and finally enforced by the mark of the beast.