It is frightening. Communist China has so much influence over the American economy that they could bring us to our knees. It could potentially be more devastating than 9-11. And Our government sits idly by does very little to protect us. Just as they did very little prior to September 11th:
Over the winter, as Wall Street was losing tens of billions of dollars due to the mortgage and credit crises, it wasn’t the Fed or Congress that came to the rescue. It was something called sovereign-wealth funds -- pools of money controlled by foreign governments.
Desperate for cash, some of Wall Street’s ailing
mega-banks -- like Citigroup -- reached out to these funds. So, for instance, Abu Dhabi bought $7.5 billion worth of shares in Citigroup.
Altogether the sovereign-wealth funds of countries like Abu Dhabi and Kuwait have spent over $30 billion bailing out our financial system.
Which has raised troubling questions: are these mostly undemocratic regimes saving Wall Street … or invading it? As correspondent Lesley Stahl found out, one fund is of special concern. It's new, highly secretive, and the fifth largest in the world.
Welcome to the Beijing headquarters of the China Investment Corporation, where 180 employees are looking for companies to invest in in the West.
"How much do you have to invest?" Stahl asked the fund’s president, Gao Xiqing.
"$200 billion," Gao replied.
[...]"Now, some people consider what you're doing, as a huge threat," Stahl said. "Your real intention is to 'gobble us up,' you know. They see you as vultures, really. I mean, I’ve seen that word."
[...]the problem is that China has over $1.5 trillion in reserves, the world's largest currency surplus: and it’s growing by $1 billion a day.
"China has so much money that they can spend buying U.S. companies that the danger is that they can strip these companies," Navarro said. "They can strip the companies of jobs, research and development, technology."
[...]we’re all but dependent on Chinese investments. Beyond this fund, China holds half a trillion dollars in US Treasury bonds. For that reason economist Navarro says they have us over a barrel. If they don’t like our behavior, he says all, they have to do is dump all their U.S. investments. It’s known as the financial nuclear option.
"What would that do? That will cause interest rates to spike. Mortgage rates to spike. Inflation to spike. The dollar to go through the floor. The stock market to go into chaos," Navarro said. "We would be in deep, deep, deep trouble."
"The nuclear option, financial nuclear option is China’s pulling all its money out of U.S. treasuries," Stahl said to Gao.
Read the entire article/transcript...
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