I recall that Paulson told the Chinese that dumping too many bonds would be the equivalent of an act of war. I don't remember the source.
Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901 www.michaelperelman.wordpress.com -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Ann Davis Sent: Tuesday, June 30, 2009 1:44 PM To: Progressive Economics Subject: Re: [Pen-l] Better formatting: Bondage in the Bond Age: A CaliforniaView So is this "structural adjustment," American style? We can't run up our debt too much without upsetting the Chinese bondholders as well? Ann At 10:25 PM 6/29/2009, you wrote: >In the midst of the Bush-Obama balance sheet bailout, one group >stands out in its >importance -- bondholders. I know -- a couple of times some >bondholders have had to >take a haircut to protect other investors. > >Here in California, with our $24 billion deficit, it seems like nothing -- >absolutely nothing -- and threaten bondholders. Yes, some >bondholders are pension >funds or charitable organizations. A minority of Republicans along >with a movie star >governor have adamantly refused to raise taxes, especially those >taxes that might >affect the class of people who are bondholders. > >Education and healthcare are being slashed beyond recognition. My >God, even prisons >might be cut a bit. The state is also raiding the treasuries of >cities and counties >for funds. Their response will be the same as the state's: cut back >on anything that >might help the poor and if necessary extend the cuts to the middle >class. All this >so that California can payback its bondholders. No haircut here. >They must be paid >back in full. > >And the children, deprived of adequate education and health care, of >course, they >must make a modest sacrifice to protect the interests of bondholders. > >-- > >Michael Perelman >Economics Department >California State University >michael at ecst.csuchico.edu >Chico, CA 95929 >530-898-5321 >fax 530-898-5901 >www.michaelperelman.wordpress.com > >_______________________________________________ >pen-l mailing list >[email protected] >https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
