The day the masses were fearing would never appear seem to have just been hit by the reality of the giant tiger on the other side of the world beginning to awaken. Since 1994 China has pegged its currency to the US dollar in attempts to siphon manufacturing and industrial bases from the United States, where in 2005 it switched to a tightly banded currency regime, but for all intents and purposes, still a currency peg.

Now that China has bought all the US treasuries it can buy without feeling more nervous of not seeing any return on default, they have essentially cancelled their willingness to continue funding the rising United States national debt through the purchase of treasury bonds. The planned deal, according to mainstream economists, was that the economic alignment would be fixed so that China would be the producer of goods for the US, and the US would purchase these goods with investments sold to the Chinese in the form of treasury bills.

This may have seemed like a good idea at the time, but as soon as the US started piling up more debt, and as soon as the mortgage lending and economic crisis took hold, it became less and less palatable for our pending Asian overlords to continue purchasing increasingly worthless US dollars.

Now is your time to purchase Gold and Silver coins at extremely discounted rates to hold value of your precious and hard-earned money.

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China has ‘canceled US credit card’: lawmaker

WASHINGTON (AFP) — China, wary of the troubled US economy, has already “canceled America’s credit card” by cutting down purchases of debt, a US congressman said Thursday.

China has the world’s largest foreign reserves, believed to be mostly in dollars, along with around 800 billion dollars in US Treasury bonds, more than any other country.

But Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February.

Representative Mark Kirk, a member of the House Appropriations Committee and co-chair of a group of lawmakers promoting relations with Beijing, said China had “very legitimate” concerns about its investments.

“It would appear, quietly and with deference and politeness, that China has canceled America’s credit card,” Kirk told the Committee of 100, a Chinese-American group.

“I’m not sure too many people on Capitol Hill realize that this is now happening,” he said.

The Republican lawmaker said that China was justified in concerns about returns from finance giants Fannie Mae and Freddie Mac, which were bailed out by the US government due to the financial crisis.

Kirk said he was the first member of Congress to tour the Bureau of Public Debt, which trades bonds, and was alarmed at how much debt was being bought by the US Federal Reserve due to absence of foreign investors.

“There will come a time where the lack of Chinese participation may have a significant impact,” Kirk said.

“We should track that, because up until last month they were the number one provider of currency to the United States and now they’re gone.”

With China’s economy also hit by the global economic crisis, Premier Wen Jiabao has openly voiced concern about the status of his country’s investments in the United States.

China has also floated replacing the dollar as the key international currency with a basket of units bringing in the euro, sterling and yen.

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