Nancy Pelosi is visiting China over the weekend to discuss bilateral relationship between US and China. I believe the biggest topic that will be discussed off the official channel is the touchy issue of US treasury debt purchase. China for past several month has signaled that they were concerned with declining dollar value. Of course this is a very legitimate concern considering that they hold over a trillion dollars worth of dollar in their current asset.
Now with over $100 billion of US treasury coming on auction to finance our massive defecit, you have to wonder who will be buying them. Remember that interest rate skyrocketed on the US treasuries over the past few weeks. In order for the auction to end smoothly, you need foreign government's purchase of our debt (ie China). It's just speculation, but there could be a move by China to under-purchase treasury notes next week to signal to US their displeasure of falling dollar values (which is mostly due to the Feds running the printing press to keep banks afloat).
On a side note, it was disgusting to see Pelosi eagerly grabbing Chinese officials hands. It looked like we were begging for money to finance our debt. Have we lost all of our pride to go running to the dictators.
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