billion deficit reduction plan and does not enable the U.S. government to solve the problem. An analysis released in June by the Congressional Budget Committee report, to maintain the existing national debt and GDP ratio in 2085, need to be taken, including budget cuts spending, increase the proportion of tax, or any other measures to ensure that government revenue in the next 75 years. can be accounted for 8.3 percent of GDP. To accomplish these goals, the deficit reduction plan in the next 10 years will reach 15 trillion, nearly four times as much as Obama's plan.
As of the end of May, according to data released this month by the U.S. Treasury, foreign creditors hold U.S. Treasury bonds reached 4.5140 trillion U.S. dollars, the month of $ 1.1598 trillion U.S. Treasury holdings, is still the largest creditor of the United States. If the United States defaulting on its debt, China will suffer serious losses.
the one hand, the risk of amplification of the large dollar foreign currency reserve assets of U.S. debt "risky assets" has become obsolete; the other hand, the debt crisis in Europe aggravate Japan's economic slump, it is difficult to find than the U.S. Treasury security level a higher level of investment products, BOC Hong Kong's senior economic researcher Billy WONG, so whether future decisions holdings or holdings of U.S. debt, we must face to maintain the security of state assets "two-sided problem.
Nevertheless, the United States finally scheduled to raise debt ceiling is not very surprising. Citigroup chief economist for Greater China, Shen Ming Gao analysts believe that the previously accepted the interview of Southern Reporter (blog) In addition to scheduled debt ceiling, the United States had no choice because they can not bear the cost of debt default. "If the first batch of default claims investors will worry about the next the same event of default. Most importantly, the recurrence of new debt, not someone willing to buy.
Earlier this month, Xia Bin, China's central bank monetary policy committee (microblogging) has issued a warning that China should speed up the reserve diversification to hedge against the dollar may be long-term risk of devaluation.
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"U.S. 14.3 trillion national debt, 6 trillion Social Security Trust Fund has no transactions outside the country who holds more than 40,000 billion, foreigners held about 5 trillion, almost all of the external debt are China, Japan hold , is equal to is stuck. "Xie said yesterday that its reference to the diversification of foreign reserve is quite popular in recent years the question:" China's foreign reserve diversification is a slogan, because the exchange rate and dollar linked, how could the outside Reserve diversification.
the Hoover Institution Senior Fellow, former President Bush's chief economic adviser, M ichael J.Boskin said: "In my opinion, the word 'not sustainable' does not cover the United States face the whole problem. Not balanced between the rapid expansion of health care expenditures and intergenerational social security system will make the United States to face more severe challenges in the next decade.
Another issue of concern in
raised the debt ceiling, the U.S. monetary policy may be relaxed again. Continued to start the dollar printing press or push the high global commodity prices. By then, the price of non-ferrous metals, coal, agricultural products on the global market will continue to rise.
Shen Minggao that the only country that meets these two conditions may only be the event of default: public debt accumulated huge amount of money, but the state budget deficit is small. "Now live no problem, a huge debt burden, so to get rid of it. "But the moment the United States saddled with huge debt at the same time, the face of high budget deficit. Therefore does not have to default on its debt capital.
According to foreign media sources, the program will be approved to the upper limit of U.S. debt ceiling to $ 2.1 trillion. In this regard, a senior official of anonymity said, this figure can also ensure that the United States in 2013, do not need on this issue continue to the Congress vote, and can guarantee the end of the 2012 presidential election will not be subject to U.S. debt The impact of the crisis.
This is also, after rating agencies adhere to without a strong deficit reduction plan, even if the Congress is the proportion of motion by raising the debt ceiling, the same will cut the AAA credit rating in the U.S. federal government reason.
America debt crisis was temporarily paragraph
is worth noting that this initial agreement does not include any tax action. Previously, Obama and the Democrats have been hoping to strengthen the taxation of the rich to increase their income, the collection of $ 1 trillion debt reduction. The move by the resolute opposition of Republican lawmakers.
U.S. economy is facing a structural imbalance
Even President Obama launched the 40 000
China faces the dilemma
while for China, although the United States succeeded in raising the debt ceiling, the situation is still hardly be easy.
away from U.S. debt breach deadline only two days on the occasion, the U.S. Democratic and Republican on the U.S. debt ceiling to reach an agreement, including agreement to cut the budget deficit program.
August 2, U.S. $ 52 billion of national debt maturity redemption. If the figures can not be raised to $ 14.3 trillion debt ceiling, unable to continue to issue new debt to repay old debts, the United States is bound to default.
U.S. President Barack Obama announced on the evening of 31 local time, the U.S. debt ceiling to reach an agreement with the House and Senate Democratic and Republican leaders to ensure that the U.S. debt will not default occurs after August 2, to avoid triggering a U.S. The economic earthquake and embedded in a global economy. The agreement covers the initial cut the budget deficit of $ 1 trillion, a congressional committee in November to submit a further deficit reduction program.
In fact, this succeeded in raising the debt ceiling, limited to the U.S. in the long run. "The U.S. financial revenue of $ 2,000,000,000,000, spending $ 3.6 trillion and still rising. This is a structural problem. "Xie said yesterday.
"The main purpose of the United States is to survive the next year's elections, fiscal spending is not the near future will be reduced, declining commitment to the future, so right now the economy is running and has no effect. "Independent economist Andy Xie (blog) yesterday south are told reporters," For the United States, 900 billion may be six or seven months on the run, the second round of the 1.5 trillion that the Congress can not by the reduction plan all government costs in proportion to decline. Which have some use in the long run, but in general World pipe network reported that the world's steel pipe network to provide the world's steel pipe network editor , and no change in U.S. fiscal problems.
Xie said, "once again the possibility of relaxation of U.S. monetary policy is relatively large, if oil prices have decreased significantly, should provide an opportunity to give the Federal Reserve. But would not necessarily say that the QE 3, but will make other movements. For example, the original is light to buy bonds, due back to the Fed's money used to buy other assets, such as corporate bonds, mortgage and so on.
the three major rating agencies --- Standard & Poor's, Moody's Investors Service and Fitch had warned the U.S. Congress failed to August 2 to raise debt ceiling, they may cut the U.S. desire to keep AAA credit rating. IM F, warned that "in view of the role of U.S. government bonds in the center of the world's financial markets, these risks may have a significant global shock wave.
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the
by the news boosted the Asia-Pacific stock market on the 1st morning a strong rebound in the Nikkei Index was up more than 2% the first trading day of the Hang Seng Index yesterday August, opening to go, all day up 0.99 percent, to close at 22663 points. Nevertheless, this did not on the fundamentals of the United States have a major impact. Respondents who yesterday south is a reporter analysis, although helpful in the long run, but cut the budget deficit program did not change the financial position of the United States. As the largest U.S. debt held by countries, both China and decided holdings or holdings of U.S. debt in the future, we must face to maintain the security of state assets "two-sided problem.
program will be immediately approved to cut the budget of 900 billion U.S. dollars in the next decade. In this regard, the specific figures given by the office of the White House spokesman Bona is $ 917 billion. Allegedly, the reduced funding will not include social security and health care reform for the elderly. At the same time, the U.S. Congress will be Obama where the Democratic Party and Boehner's Republican Party to form a special committee to study the second round of spending cuts. This committee will study the reduction of $ 1.5 trillion in various fields. It is said that the Commission on November 23 completed this work, to the House and Senate will vote. If then Congress can not pass the reduction plan World pipe network reported that the world's steel pipe network to provide the world's steel pipe network editor , the same number will automatically be cut, cuts in military and non-military aspects, but does not include Social Security and Medicare. The first step will be to cut $ 350 billion in military spending over the next decade, As to the second round of cuts figures to be studied.
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At this point, the concern of the U.S. debt crisis came to a temporary paragraph. By the U.S. bipartisan congressional leaders to improve the debt limit and cut the deficit to reach an agreement news boosted the Asia-Pacific stock market on the 1st morning a strong rebound in the Nikkei Index was up more than 2% of the Hang Seng Index yesterday, the first trading day in August, opening with go the whole day up 0.99 percent, to close at 22663 points.
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