China warns Federal Reserve over 'printing money'

Link
China warns Federal Reserve over 'printing money' - Telegraph

I have long believed that China in effect is now in control of the US at least on a financial basis.
This article's headlines seem to bear that out.

As a heavy investor, China's fears are incredibly real, and this isn't surprising in the least. Their biggest fear is the long term devaluation of the dollar, which is why they have recently started trying to diversify their portfolio. I'm just worried that this is going to lead to further, more dangerous actions.

jujuman13 said:

Link
China warns Federal Reserve over 'printing money' - Telegraph

I have long believed that China in effect is now in control of the US at least on a financial basis.
This article's headlines seem to bear that out.

Click to expand...

Not necessarily. While it's true that China has a big stake in the US monetary system and is naturally going to voice its concerns and ideas, it doesn't mean they "control" the system. Let's not forget that the US has a few choice words about the Chinese monetary system, such as China's undervaluing of the yuan. But we certainly aren't in control of their system.

jujuman13 said:

Link
China warns Federal Reserve over 'printing money' - Telegraph

I have long believed that China in effect is now in control of the US at least on a financial basis.
This article's headlines seem to bear that out.

Click to expand...

As a major investor in US Treasuries, China is in a position to flex a bit of muscle. However, their purchase of US debt also serves to keep the yuan artificially low with respect to the dollar (hence accusations earlier this year that China engaged in currency manipulation).

The result is a double edged sword--China has concerns about the US monetizing its debt, but if it bails on its Treasury holdings the yuan will skyrocket against the dollar, demolishing China's export-driven economy.

Neither the US nor China has the level of control their public rhetoric would suggest.

Reminder: China holds approximately $730b of our $11.3T public debt. That's around 6%. Even when you only consider foreign-owned debt, China only owns 24%.

Neither China nor any other individual country has as much influence over US monetary policy as people tend to think.