Back at the CMF, someone said that China had a raw deal buying US Treasuries.
Nothing can be further from the truth now, because in times of crisis, Treasuries are considered safe haven, and people are just swarming to it now. A US Treasury bond is far more secure than any bond put out by a investment house because the Treasury has the complete backing of the US government.
Frankly it is the US government---and the US taxpapers---that is getting the rawest deal here because the US government is buying worthless paper from the failing banks and investment houses. Literally paper. The savings and loans crisis a decade ago like involving Lincoln Memorial actually deal with real and tangible property, deeds, titles everything. That crisis happened because the bubble broke and the cost of the titles became less than it was mortgaged for. When the government bailed this out, it actually got some land out of it, and years later, when conditions were much better, they can turn around the land and even manage to sell it at a profit.
Today, what you're paying is some fancy piece of paper for a bond that is essentially bad debt repackaged over and over again in some pyramid scheme.
So if the Chinese loaned money to the US government, they get a US Treasury Bond, which actually is worth something because its backed up. In turn, the US government uses the money to buy back the junk bonds and mortgages that, unlike the Treasury Bond, are worth trash and has no redeeming value down the road. So the US government---and US tax payers---put themselves on a deeper _shit hole_ down the road. But they have to do it, sacrifice the future to save the present, before the financial situation cascades to other banks and into people's personal savings.
Bush is a very die hard Republican, and probably like McCain, believes in the Freedom to Fail concept. But the facts displayed to him must be so chilling he had to turn around and do the largest government intervention in the US economy since Franklin Delano Roosevelt, called both Obama and McCain to his office and even made a public appeal to the people. I lost my faith in Bush after all these years, but what he is doing now is the best thing he can do and the only thing he can do now.