What if China Dumps our Debt?

We have been asking the question for a few years now.....what would USA do if China gets upset with us over Taiwan or North Korea or Japan....and says, "Screw you! We aren't loaning you one more red cent!...plus we demand early payment for the $1 trillion you already owe us!! PAY US NOW!!"

It's always good to have a Plan B.

Please understand how many U.S. businesses went bankrupt over the past 3 years SIMPLY because banks shut down their credit lines and they couldn't make payroll. Could this all be a foreshadowing for what may happen to the U.S. if it's creditors shut down this country's line of credit?

Today, Reuter's News is asking the same questions....What is our Plan B?

Analysis: What is Plan B if China dumps its U.S. debt?

With Chinese President Hu Jintao due to arrive in Washington on Tuesday, it is worth asking about U.S. officials' Plan B just in case one day relations take a surprise turn for the worse and Beijing dumps its holdings of U.S. treasuries.

China is officially the United States' biggest foreign creditor, with roughly $900 billion in Treasury holdings -- or over $1 trillion with Hong Kong's holdings included.

That means it could do severe damage to U.S. debt markets if it suddenly started selling large amounts.

But Beijing could also justify pulling back sharply from U.S. Treasuries if the dollar were to plunge, perhaps because of Washington's failure to curb its budget deficit and debt.

"I worry that we could be at a tipping point," said Eswar Prasad, a Brookings Institution economist and former International Monetary Fund official with responsibility for China.

"If the Chinese say 'We're not buying any more Treasuries,' this could act as a trigger around which nervous market sentiment coalesces," he said. "People could start wondering how the U.S. is going to finance its deficit."

See it here; http://www.reuters.com/article/idUSTRE70H5NX20110118?pageNumber=1

Good point! People WOULD start to wonder how the U.S. is going to finance $14-15 trillion in outstanding debt...in addition to the $1.5 trillion per year we continue to borrow....in addition to the $50 trillion of Social Security and Medicare promises we have made.

They may actually begin to LOSE FAITH in the U.S. government's ability to manage it's financial affairs.

So what happens to our financial system when it is 100%, "Backed by the full faith and confidence of the U.S. Government."?

Jesus said, "Have faith ONLY in God."

How many Americans have more faith in the U.S. government than they do in Jesus Christ?

Answer: Most of them.

How long will God let this sick society worship at the altar of Mammon?