For anyone who still doubted the growing global influence of such emerging powerhouses as China, consider this: The U.S. government’s decision to take control of foundering mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) was driven not by worries about the fading U.S. housing market, but by concerns that foreign central banks in China, Japan, Europe, the Middle East and Russia might stop buying our bonds.
Back in the 1980s, the message of the S&L Bailout was that foreign money was safe in the US because no matter what happened, the taxpayers would be forced to cover any losses. That promise made by the US Government to the world's wealthy was carried out by the Resolution Trust Corporation on the backs of the US Taxpayer and persuaded foreign investors to keep their money here in the US even as it became clear that our economy was in decline.
When it became obvious that the financial systems were again in dire straits, I noted at this site that once again the US Government would again savage the US taxpayer for the cash needed to protect foreign investors.
And here we are again.