Living on a Chinese Rock

I’m living on a Chinese rock.  All my best things are in hock.

Dee Dee Ramone wrote those words about heroin addiction, incorporating them into one of the greatest punk rock anthems.  But it might well be said that all of America is today living on Chinese rocks, and putting our best things in hock.

The astonishing truth is that China owns over $500 billion in US Treasury notes, and over $500 billion in GSE (Fannie Mae and Freddie Mac) bonds.   China is therefore one of the principal beneficiaries of the taxpayer-funded bailout of those GSEs.  In fact, approximately 1/5 of all outstanding GSE debt is owned by foreign central banks, principally those of China and Russia.  The mindblowing truth is that to assure that these foreign governments, who we until recently recognized as ideological enemies, suffer no loss or credit risk, our government has granted the GSEs an unlimited line of credit on the US treasury.  The ultimate cost to the taxpayer will likely be astronomical.

Proverbs 22:7 tells us that “the borrower is slave to the lender.”  The lender to whom our spendthrift government is slave, is the goverment of China.  We have become a debtor nation, at the mercy of our Chinese lenders, seemingly unable to function without the ability to borrow back from the Chinese some of the mountains of money our citizens ship them for the crap on Walmart shelves.

Shame on us.

We should’ve been rich.  But we’re just digging a Chinese ditch.

Grace and Peace