****SEE UPDATE BELOW*****UPDATE: MORE INFO**
**** EMINENT DOMAIN? MAYBE/MAYBE NOT*****
UPDATE: Yes, the story is in dispute (see my comment section) and it could be wrong. I prefer not to take it down but rather to investigate (readers welcome). Yes, Atlas is right 99% of the time -
I am not an economist but here is what I know:
It's a fairly complex area. Usually it's a question of the US trying to collect debts others owe us or international lending organizations, where they default. Like Peru - so-called "vulture funds" go after this debt before the statute of limitations runs out.
1. See here - a brief summary: here
2. Here is a more temperate article: http://www.chrismartenson.com/forum/does-future-include-collateralized-sovereign-borrowing/14139
3. Also a similar - not identical - concept of collateralizing sovereign bonds sold to a foreign power (or banking interest essentially so identified with the government that it is defacto the government) was floated by the UK concerning shariah financing here: http://www.independent.co.uk/news/uk/politics/darling-to-decide-on-use-of-sharia-bonds-for-public-spending-783435.html
"Treasury officials confirmed that the Chancellor would decide whether to help fund the Government's public-spending programme by borrowing funds via Islamic law-compliant bonds, known as sukuk, within the next few weeks."
Because shariah requires "real" assets in shared equity arrangements, the UK was genuinely considering funding new investments in public infrastructure using shariah funds. It's not quite the same as using existing infrastructure as collateral for future Chinese purchases of U.S. debt (land, corporations - think all kinds of assets, not just real property), but it raises similar questions of national sovereignty. It's one thing for foreign countries to own assets in the country - lots of countries own US property and corporations (that's investment and it's generally thought to be a good thing). It's another for foreign countries to own federal properties or have federal properties offered as collateral. But logically - they're either collateralized with Fort Knox gold or with some other federal asset.
4. The Bloomberg article is straightforward - the Chinese are
worried that the U.S. government will try to pay off its debt cheaply
by inflating the currency (making a "weak" dollar) - see this
This quote from Bloomberg does not mention eminent domain - but it does raise the general issue of "secured" lending: "China may try to link trade and currency policy disputes to its future investment in Treasuries, said Lu Zhengwei, an economist in Shanghai at Industrial Bank Co., a Chinese lender partly owned by a unit of HSBC Holdings Plc. "
That would not be anything new - trade and currency policy, and
investments in other countries' debt are always linked. That's what
There are a number of ways collateral can be generated. At some point, debt holders do want to collect - or if Sovereign bonds go into default, as indeed China's bonds have in the past, there are historical precedents for purchasing those bonds at a fraction of their face value. A number of US fortunes were made doing just this with defaulted sovereign debt.
But the eminent domain solution seems unlikely. It's actually an interesting question how this gets worked out, in terms of maintaining the U.S. debt in undefaulted status.
I think people also exaggerate how much debt China owns - see wiki (usual caveats):http://en.wikipedia.org/wiki/United_States_public_debt
Japan owns almost as much, and UK comes in third. If you think of this systematically, the question becomes all that interlocking financial collapse of those countries combined with the U.S
UPDATE: Please see CLINTON GROVELS AT THE PANSA'S DOOR AMERICAN THINKER hat tip Michael
UPDATE: This book on eminent domain gets a little into the sovereign debt issue in footnotes - you can see how technical the question gets -
or this good comment: (excerpt)
Because nations don't "declare bankruptcy," then this is what happens: Assets/firms in your country are either bought up by foreigners or they become the target of hostile takeovers and attempted takeovers by foreign investors looking to profit off the situation after they note their purchasing power increased in the market in which currency devaluation occurred. Sometimes you are bought out against your will. In the mid 1980s when the US dollar began to devaluate at a rapid pace due to massive deficit spending under Reagan, Japanese investors began to actually buy up Manhattan real estate when they noted their purchasing power increased in the US market.
Eminent domain requires using the power of the state.
Instead, Chinese may just scoop up investment properties the way the Japanese did in the 80s, or the Arabs in the 90s and early 21st century. See here:
Can he do this? Can he use our property for his pork payoffs?
Impeachment Time: Obama Grants Eminent Domain Rights to China to Secure Debt The Examiner (hat tip terri)
They own us.
(Photo credit Future Atlas)
So President Obama gave the Chinese eminent domain rights to American land and businesses as collateral - i.e. we don't pay, they now own America.
From Patriot Room.
Because it looks like our wonderful new administration is granting the Chinese eminent domain as collateral for US debts. Yea you read that right. That means when we can no longer pay for all this massive spending the Chinese can call in the loans and take our land.
The thought that American citizens and businesses could lose their land as a means of payment is downright scary. I highly doubt ANY American citizen would have voted for Obama if they knew this was coming down the pike.
Live Leak has more details.
Sources at the United States Embassy in Beijing China have just CONFIRMED to me that the United States of America has tendered to China a written agreement which grants to the People's Republic of China, an option to exercise Eminent Domain within the USA, as collateral for China's continu More..ed purchase of US Treasury Notes and existing US Currency reserves!
The written agreement was brought to Beijing by Secretary of State Hillary Clinton and was formalized and agreed-to during her recent trip to China.
This means that in the event the US Government defaults on its financial obligations to China, the Communist Government of China would be permitted to physically take -- inside the USA -- land, buildings, factories, perhaps even entire cities - to satisfy the financial obligations of the US government.
Put simply, the feds have now actually mortgaged the physical land and property of all citizens and businesses in the United States. They have given to a foreign power, their Constitutional power to "take" all of our property, as actual collateral for continued Chinese funding of US deficit spending and the continued carrying of US national debt.
This cannot stand. It is traitorous and Obama should be impeached.
MMC RTV Slovenija - prvi multimedijski portal
RTV Slovenija - 19 hours ago
The crash of the US economy has begun FEDS GRANT EMINENT DOMAIN AS COLLATERAL TO CHINA FOR US DEBTS! Beijing, China -- Sources at the United States Embassy ...
Obama's $3.6 trillion budget marks a major shift
Hilary is in China right now offering them eminent domain to keep buying our debt. That means if we don't make the payments, they will start foreclosing...