``China is very worried about the safety of its assets,'' he said. ``If you want China to keep calm, you must ensure China that its assets are safe.''
Now that is a money quote.
In case it doesn't have a sharp enough point on it, let's hammer the point home:
Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says
Sept. 25 (Bloomberg) -- Japan, China and other holders of U.S. government debt must quickly reach an agreement to prevent panic sales leading to a global financial collapse, said Yu Yongding, a former adviser to the Chinese central bank.
``We are in the same boat, we must cooperate... If there's no selling in a panicked way, then China willingly can continue to provide our financial support by continuing to hold U.S. assets.''
An agreement is needed so that no nation rushes to sell, ``causing a collapse,'' Yu said.
Still no direct relevance to the "bailout"/"rescue" and our mission of electing more and better Democrats? OK, I guarantee you'll find it beneath the fold...
(( bonus: 7 big-picture take-homes are at the bottom of the basket below ))
Japan is the biggest owner of U.S. Treasury bills, holding $593 billion, and China is second with $519 billion. Asian countries together hold half of the $2.67 trillion total held by foreign nations.
China, Japan, South Korea and others should meet soon to seal a deal, said Yu, a former academic member of the central bank's monetary policy committee. The talks should involve finance ministers, central bank governors and even national leaders, he said.
`Grave Threats'
U.S. Treasury Secretary Henry Paulson is urging Congress to pass a $700 billion plan to remove devalued assets from the banking system. Federal Reserve Chairman Ben S. Bernanke said Sept. 24 that the U.S. is facing ``grave threats'' to its financial stability.
China's huge holdings of U.S. debt means it must bear a large proportion of the ``burden of sorting things out'' in the U.S., Yu said. China is not in a hurry to dump its U.S. holdings and communication between the two nations every ``couple of days'' is keeping Chinese leaders informed and helping to avoid a potential panic, he added.
``China is very worried about the safety of its assets,'' he said. ``If you want China to keep calm, you must ensure China that its assets are safe.''
For more intricacy and intrigue, see Zacapoet's Is THIS the reason for the bailout? --- especially in regards to the intermediate chain links of Treasury Auctions and Primary Dealers.
Dozens of dKos folks have done indepth diaries on facets of the backstory in recent weeks; mine was Greedy Old Party crashing... into an Even Greater Depression.
But my goal in this diary is to zoom out rather than to zoom in.
So, here are 7 bigger-picture take-home's for your contemplation.
- We'd be well off to keep inoculating ourselves and our compatriots against Shock Doctrine tactics.
- We'd be well advised to be prepared and always ready to use our web-swarm-aikido to pre-empt any Bush/Cheney/McCain last-minute excuse (such as "congressional failure", "inadequate bailout", "treasury backruptcy", etc, etc) to change the rules of the game between now and 2009 Jan 20, send humorous viral signals (thank God for Colbert :), thwart any desperation attempt by Bush/Cheney to invoke extreme Unitary Executive doctrine (activation of dangerous signing statements, Insurrection Act/Enforcement of the Laws to Restore Public Order Act, etc), and neutralize any shock they may try to perpetrate.
- We must continually renew our vigor, get present to the facts, and take back our power -- and that means not only creating an Obama landslide and Democratic gains at all down-ticket levels, but also safeguarding our key enablers: network neutrality & electoral integrity.
- Remember the close buddy of George Bush, Dick Cheney, Ralph Reed, and Jack Abramoff named Grover Norquist? He's famous for his widely quoted comment that he wants to shrink government "down to the size where we can drown it in the bathtub." Well, for 8 years they've been doing their damnedest to push the baby underwater, and this week they're going for a last-gasp snuff-out. Don't let people forget the intentionality of what they've been doing. Our winning meme: re-branding the GOP as "The Party That Wrecked America"
- But there is something much bigger, much much bigger going on. After the mind-numbing numbers of the past few weeks, perhaps you're ready to (re)read the classic blog post: The True Cost of Oil: $65 Trillion a Year?
- Who could have forseen all this? Well, many did, and some are even on record, and a few wrote it eloquently. (I've been saying this stuff since the late 70's, but I can't write worth a damn compared to JHK.) So, remember: Kunstler Told You So (Thank goodness I was handed a copy of "The Long Emergency" at Yearly Kos (2006) -- it was the most impactful takeaway from the whole trip to Las Vegas, and I read it cover-to-cover when I got home. If you haven't read it... please read it. Because: the key to the future is to stand on top of the fundamental 90% that Kunstler gets right, and then instead of the 10% he gets very wrong, co-create a workable way forward.)
- Bottomline (the doomy & gloomy version): Unless and until we align our economic models with the underlying ecologic reality, there is no way out of the Long Emergency.
- Bottomline (the empowering e pluribus unum version): Ecosystem is that unifying embrace that includes the totality of all that is environment, and all that is organism; all plants and all animals; all humans and human society and culture and tools and technology; all that is spirit or energy or material or information; all that is economic and all that is ecologic. The whole system of life on our home planet: Ecosystem is the whole enchilada. So every progressive cause is indeed a facet of an overarching imperative: restoring and sustaining ecosystemic health and well being.