More on China's Holding US economy over boiling oil with Bush help

"This administration, in order to fund a war that shouldn't be being fought and tax cuts that weren't needed for the wealthy — we're now in debt almost a trillion dollars — a trillion dollars to China. We better end that war, cut those taxes, reduce the deficit and make sure that they no longer own the mortgage on our home."

His comment drew this response from leading Democratic candidate Sen. Hillary Clinton: "I want to say 'Amen!' to Joe Biden, because he's 100 percent right."

The reality is that China is probably going to slow down its investment in U.S. bonds anyway. This is not so much because they don't like us, as it is because they are becoming savvy about where and how to spend their huge nest egg.

Low-interest U.S. bonds? According to an article in USA Today, some Chinese bankers say it would be better to start buying into businesses (U.S., European, Asian), where you get a better return and have long-term growth. Think the Japanese in the 1980s buying U.S. skyscrapers (Rockefeller Center) and golf courses (Pebble Beach).

Back to the nuclear option — oddly enough, many voices in the U.S., especially in the U.S. Senate, are pressing China to re-value its currency up against the dollar, making Chinese goods more expensive and U.S. goods cheaper for the Chinese to buy.

The Chinese are resisting. Their cheap currency helps them sell their goods. And that is where the nuclear (currency) option comes in… the U.S. is being warned to stop meddling in China's internal affairs.
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