Thread: Seriously? Look who's spanking U.S. on money: Financially troubled Cyprus and China

WND EXCLUSIVE

Seriously? Look who's spanking U.S. on money

Financially troubled Cyprus: America needs to cut spending

Published: 6 hours ago
Video at the Page Link:

Two other countries – the financially failed Cyprus and the financially manipulative China – now are telling America how to run its finances.

The United States Congress just this week voted to allow President Barack Obama to borrow and spend or give away more money – this time without a dollar limit – assuring that debts due and interest payments compounding will be paid.

The White House immediately announced that another $328 billion had been borrowed, pushing the nation’s debt past $17 trillion.
But the rest of the world has been watching the implications for the U.S. dollar, the favored currency globally for people and nations to have, and several countries now have started offering advice.
Former Cypriot Finance Minister Michael Sarris, for example, said spending cuts are going to have to happen in the U.S.
“The U.S. has been fortunate in the sense that it’s like a bank, it prints the money that other people accept. So you can live beyond your means over an extended period of time without being punished by the market,” he said.
However, he added, “Clearly we have seen that enough people are now seriously concerned about that and both domestically and internationally so the answer is yes, [America has been living beyond its means.]”
His comments came in an interview with RT television.
“Reasonable people can have differences about the role of government. Is it too big? Too small? Should it be borrowing? Too much? Should it be solving Social Security…,” he said. “But the way to solve this problem is not on a cliffhanger, on a crisis, and on a kind of impression that your” blackmailing.”
Cyprus had to be bailed out by international banks, and even confiscated massive amounts of wealth private companies and individuals had in their bank accounts, to remain solvent earlier this year.
“Taking a more responsible attitude,” he said, was important. “Take a national, global responsibility and see this problem. … It doesn’t really help to be polarized.”
Further, those cuts are required, he said.
“You cannot pay for everything… you really have to make choices. … You’ve got to make those cuts,” he said.
China, too, was full of advice.
According to the New York Times, China is the world’s largest investor in American public debt, with an estimated $1.3 trillion in holdings.
So it has a vested interest in what happens.
But a recent commentary from the Xinhua news agency called for a replacement of the American dollar, and an overall “de-Americanized world.”
Not too different from the noises emanating from Beijing several years ago when the U.S. also was facing a banking crunch.
The Times reported, “Xinhua embellished its call for a new reserve currency with a scathing indictment of the United States’ broader role in the world, saying that the Obama administration claimed ‘the moral high ground’ while covertly ‘torturing prisoners of war, slaying civilians in drone attacks and spying on world leaders.’”
But analysts also pointed out that Beijing’s hands are tied. China’s central bank, the People’s Bank of China, cannot dump its Treasury bonds without driving down their value and incurring a painful loss on paper.
“This is certainly a wake-up call for them that holding U.S. government securities is not risk-free,” Nicholas R. Lardy, an expert on the Chinese economy at the Peterson Institute for International Economics, told the Times. “What they should be doing is quit adding to their foreign reserves.”


http://www.wnd.com/2013/10/seriously...-u-s-on-money/

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http://www.wnd.com/2013/10/seriously...-u-s-on-money/

This Stunning Chart SHOULD Wake People Up About America's Debt




Kyle Becker | On 18, Oct 2013

Jon Gabriel at Ricochet put together this revealing chart, which should put to bed any argument that the political class is in any way, shape or form acting responsibly with the nation’s finances.
If the green is the U.S. government’s revenue, and yellow is the deficit, then it takes a Sesame Street-level of understanding to grasp that the red part is bad – very bad. This is beyond party bickering; both Republicans and Democrats need to get serious about this brewing fiscal disaster.
One of Ricochet’s commenters, George Savage, hit the nail on the head with this more specific explanation of why debt is bad:

The Obama administration today is benefiting from record low interest rates. At the current 2.43% average, financing US sovereign debt in FY2013 cost $416B; chicken feed by federal standards. Apply the more typical 6% Clinton-era interest rate and existing debt service totals $1.03 trillion annually, 27 percent of total FY2013 outlays.

If interest rates go up, or the American people and the world lose confidence in the dollar, this economy — and all those lavish, compassionate welfare programs along with it — goes kaput.


http://www.ijreview.com/2013/10/8809...americas-debt/

Dollar Tumbles, Debt Inflates, International Community Calls For Alternative

October 21, 2013 by Sam Rolley

Government dysfunction has pushed the value of the U.S. dollar near its lowest point of the year against the euro. Meanwhile, the price of U.S. Treasury debt has skyrocketed to its highest point since January.
The Wall Street Journal noted on Friday:

Yields on the 10-year Treasury note, which move inversely to prices, touched 2.538%, the lowest level since July 24, according to CQG. The dollar continued its slide against major rivals, including the euro, the yen and the pound. The euro recently bought $1.3686 from $1.3676 late Thursday, while the pound fetched $1.6186 from $1.6165. The greenback traded at ¥97.71 from ¥97.93.

As a result of the government shutdown’s effect on dollar value and debt prices, the Federal Reserve’s easy money policy is expected to continue beyond December, when the Fed was initially expected to begin the process of tapering government stimulus efforts. Instead, the central bank is likely to continue pumping until March 2014.
As the dollar continues to slip, policymakers and investors in China and Japan have reportedly begun making plans to distance themselves from the dollar to ensure that Washington’s dysfunction doesn’t impair their own economic viability.
“We’re glad a deal has been struck,” said a Japanese policymaker Reuters. “But the uncertainty will remain and it will be the same thing all over again early next year.”
Last week, China made headlines when officials in the nation urged the international community to replace the dollar as the international reserve currency.
“As U.S. politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world,” China’s official state-run news agency, Xinhua, said in an English-language commentary before the U.S. Congress came to a temporary budget agreement.
Since 2009, China has been calling for a world reserve currency replacement for the dollar. It has also been taking steps to make the yuan, its own currency, a viable alternative.
China holds more than $1.3 trillion U.S. Treasury debt.

Filed Under: Conservative Politics, Liberty News, Staff Reports

http://personalliberty.com/2013/10/2...r-alternative/