>> "It turns out the biggest supporter of the Fannie Mae and Freddie Mac
>> bailouts has been the Chinese government. The Chinese own about half a
>> trillion dollars in Fannie and Freddie securities and they've put the
>> warning out to Treasury Secretary Hank Paulson they expect to be repaid
>> in full. The fear among Mr. Paulson and other Treasury officials is that
>> if Fannie and Freddie debt isn't repaid at 100% par, the Chinese may
>> start dumping their hundreds of billions of dollars of Treasury
>> securities, possibly causing a run on U.S. government debt and sharply
>> raising Uncle Sam's borrowing costs."
>>
>> - Political Diary
>> Wall Street Journal
>> July 29 2008
> Hmm, well, no surprise there. The integrity of the dollar depends on the
> GSEs' debt being repaid in full. I think Paulson knew this even before he
> got the call from China. And no doubt he told Bush he had to sign the
> legislation regardless of any objections coming from the right.
=========================
Sure, but still interesting as another illustration of how the worm has
turned in international affairs from the days when it was the imperialist
powers who issued the ultimata about debt repayment to the poorer countries.
The transformatiion of the US from a creditor to a debtor nation, with it's
foreign debt having doubled as a percentage of the national debt in the past
two decades, together with the appearance of new forms of asymmetric warfare
in Iraq and Afghanistan which have stymied the powerful US military, have
imposed limits on America's imperial ambitions. It's chastened and
frustrated the US right - so arrogantly confident in its ability to reorder
the world in the "new American century" when it took power eight years ago -
as seems evident in the above quote.