Support For Obama Budget Waning

March 25. 2009

Support for President Barack Obama's multi-trillion dollar budget continues to wane. China, the largest buyer of U.S. debt is concerned about the risky financial plan the administration is undertaking, as they are owed $1 trillion dollars.

Signs Of Stress: Warren Buffett's Downgrade, China's Treasury Jitters

March 13, 2009 11:09 AM ET - Two long-held beliefs about the American financial system got taken down a peg today, namely that Warren Buffett can do no wrong, and that China will always buy our debt.

From Reuters:

...Meanwhile, China's Premier Wen Jiabao says he's "worried" about the health of China's $1 trillion worth of U.S. Treasury bonds. The consequence of a slowing U.S. economy, weakening stock market and massive government spending are threatening to send the dollar lower over time, devaluing holdings like Treasuries.

...Quoted in the Financial Times, Luo Ping, a director-general at the China Banking Regulatory Commission, put it more bluntly ...

Mr Luo, whose English tends toward the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.” ...

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