Think About This....

The US government needs Japan and China to continue to buy US Treasuries.

The US Treasury has decided to purchase a record number of Treasuries themselves in order to try and stimulate the US economy.

The US Congress is approving a higher budget and likely will approve even higher budgets.

The borrowing and government spending will weaken the value of the US dollar.

The weakening US dollar could impact the value of Japan's and China's investment in the US economy.

This could then drive a reduction in future purchase of US Treasuries.

Such a pull back will likely translate into a future loss of confidence which could further weaken the economy globally.

So what is the right path for China's central bank to take ? Continue to purchase US Treasuries ? Reduce these purchases ? Find a third way ?

Regardless this interlinking and cyclical argument demonstrates the intensity of the interrelated nature of the global economy.

Governments must find ways to work together and find global solutions which are not cause for conflict but are cause for cooperation.