Full Faith and Credit

The WWII generation had this phrase, "...backed by the full faith and credit of the US Treasury..."

When the US was the most productive nation in the world, and by productive we mean actual goods for domestic consumption and export, with the ability to tax the "products' manufactured and sold from its jurisdiction the US Treasury had some clout.

Now the US Treasury is taxing such things as commissions, interest and what I would refer to as "financial transactions" that generate a paper profit and a "financial interest" without actually producing something that is consumable that will be traded for something that is consumable.

It would only be expected that China as a lender would want to re-position itself from a T-Bill "note holder" to a "securitized" creditor with a first lien on a real asset that can contribute to the production of consumables. 

What the Chinese have or will realize is that the US Treasury has been plundered and that the "...full faith and credit..." is just not there.  So the Chinese government is just looking for ways to protect what was invested primarily by their aging workforce/pensioners.   With the pension function having been primarily performed by AIG, which is now 80% owned by the US Treasury, the US Treasury/Congress would now seem to be holding the bag for protecting the Chinese pension system.

It may very well take the Chinese to force the US Treasury into bankruptcy since our voters didn't elect representatives with the will-power to take appropriate action.