Global Economy

[Guest]

<b>China Slows Purchases of U.S. and Other Bonds </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->China’s foreign reserves grew in the first quarter of this year at the slowest pace in nearly eight years, edging up $7.7 billion, compared with a record increase of $153.9 billion in the same quarter last year.

China has lent vast sums to the United States —<b> roughly two-thirds of the central bank’s $1.95 trillion in foreign reserves are believed to be in American securities</b>.  <!--emo&--><img src='style_emoticons/<#EMO_DIR#>/tongue.gif' border='0' style='vertical-align:middle' alt='tongue.gif' /><!--endemo-->  But the Chinese government now finances a dwindling percentage of new American mortgages and government borrowing.

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There have also been some signs that Americans may consume less and save more money in response to hard economic times. This would further decrease the American dependence on Chinese savings.

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While those policies may run a long-term risk of setting off inflation, they also may benefit China if they rekindle economic growth in the United States and thereby revive China’s faltering exports<!--QuoteEnd--><!--QuoteEEnd-->

US home owners and very soon commercial building owners can make China bankrupt. <!--emo&--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->