Official says China to continue buying US debt and calls for new reserve currency

Susan here: China wants Globalization,hum, one must wonder why. There is a reason it's called the People's Bank Of China. China is still a Communist country regardless if they make stuff we buy. It scares the crap out of me that so much of our debt is held by China.

From The AP:

China will continue buying U.S. government debt while paying close attention to possible fluctuations in the value of those assets, a vice governor of Beijing's central bank said Monday.

Investing in U.S. Treasury bills is "an important component part of China's foreign currency reserve investments," People's Bank of China Vice Governor Hu Xiaolian said at a news conference on Monday.

"So as an important component we are naturally relatively concerned with the safety and profitability of U.S. government bonds," Hu said — a statement apparently aimed at concerns that rising debt to fund Washington's stimulus package could spur inflation and weaken the dollar.

China is Washington's biggest foreign creditor, holding an estimated $1 trillion in U.S. government debt. A weaker dollar would erode the value of those assets.

Hu's comments follow remarks earlier this month from Chinese Premier Wen Jiabao that he was "a little bit worried" about China's holdings of U.S. government debt. Wen called on the U.S. to honor its commitments, remain credit-worthy, and ensure the safety of Chinese assets.

So they want more of our debt, which is going to increase with the implementation of the "stimulus bill", but they are worried about their assets. No government does anything out "of the goodness of their heart". So keeping that concept in mind. China today, releases this:

From Financial Times.com:

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national
currencies”

Cute Huh, hold on to your hats ya'll this is going to be a bumpy ride.
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