China now has accumulated approximately $3.2 trillion in convertible currency reserves, of which nearly $1.2 trillion are held in U.S. treasury bonds. This has happened through their escalating balance of trade surpluses with America – they sell to us much more than we sell to them. In the process, China has been instrumental in putting many of our American companies out of business.
Now this huge stockpile of money gives them tremendous leverage as they could dump these bonds and reserves on the market. If they take this irresponsible action, it would immeasurably devalue the worth of our money, send the cost of goods skyrocketing, and cripple our economy. This condition has been building up for a long time and puts America in a precarious and vulnerable position, as we have been producing less each year and have increasingly been surviving on imports.
Even if they do not dump this money into the U.S. all at once, they have the power to take us over slowly by acquiring our companies on the open stock market. We have seen this in all sectors of the economy. This year they even acquired AMC movie theaters, whose 5,000 screens can now be used to inculcate our children with their culture and ideas. This will only facilitate the continued overtaking of our industries by Chinese firms.
Most of us don’t realize these dramatic changes are taking place. America is becoming a much different country than it was when you grew up in it. You will be leaving your children with a legacy they had not expected and will be very disappointed with. The standard of living Americans have come to know and expect will be no more.
They have accumulated this cash through our balance of trade deficit, which is the result of our failed trade policies. We have failed to protect our country from unfair Chinese practices that have given them an extreme advantage. Our membership in the WTO prevents us from taking the actions we need, as they rule against us 9 out of 10 times a case is brought against us. What hope is there for our country when we do not even control our own economy?
These are the issues our political leaders should be attempting to resolve. We must do something about this now. These economic issues affect us all and should take precedence over present “wedge” issues that are often concocted to gain votes. America needs a change in direction, and our political representatives need to start fighting for sound economic policy that supports the American worker.