From NPR’s website: “China is the largest purchaser of the debt of mortgage giants, Fannie Mae and Freddie Mac. Both the United States and China depend on these companies for economic survival.”

  Leave it to NPR’s Adam Davidson to spell this out in a very straightforward way.  In a lighthearted, humorous segment this morning, he analyzed how U.S. consumers buy a surplus of Chinese goods, providing China with an excess of dollar.  Beijing then loans that money back to the U.S. so that American consumers can buy more “stuff” from China.

Davidson’s segment is very much worth listening to as it travels from a recycling depot in Brooklyn all the way to Beijing and back in a mere four minutes.  Boiling things down to the basics, Davidson explains why the current scenario, of Beijing continually funding more U.S. debt, is proving unsustainable.

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This entry was posted on Monday, September 8th, 2008 at 9:59 pm and is filed under Manufacturing in the U.S., Economic Security. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.