Chinese & S. Korean economists on America's possible default

Some honest, if scary, economic comments on Sino-American relations (Bloomberg News, by Susanne Walker):

Possibility of Default

The U.S. is borrowing so much that it may have trouble paying the money back, said Jaemin Cheong, a bond trader in Seoul at Industrial Bank of Korea, the nation’s largest lender to small- and mid-sized companies.

“Yields are headed higher,” Cheong said in an interview. “More issuance will be needed to support the economy. The possibility of default is more and more as time passes.”

The government is depending on overseas investors to help fund its $787 billion economic plan. China is the largest overseas holder of Treasuries, with $696.2 billion, followed by Japan, with $578.3 billion.

Further into the article, a Chinese official comments:

China’s Three Elements

China’s top banking regulator said today the country will pay attention to safety, liquidity and profitability when deciding whether to buy more U.S. debt.

“How much we will invest in U.S. Treasuries will depend on the three elements,” said China Banking Regulatory Commission Chairman Liu Mingkang at a press conference in Beijing.

America needs to stop the spending spree. If we don't, then our banker - China - may do it for us.

Tim White