Because it would appear that the US has decided China may bypass Wall Street and purchase treasuries directly from the government.

From Reuters.com:

(Reuters) – China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People’s Bank of China buys U.S. debt using a different method than any other central bank in the world.

The other central banks, including the Bank of Japan which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn’t been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People’s Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.

The change was not announced publicly or in any message to primary dealers.

Why? Because the Obama Administration is embarrassed that China can now buy our debt directly. Because we are that far down the budget hole. And woe the day that China decides that it wants to call our debt. We would be flat owned — literally — by China. And beholden to them.

In that vein, China is now the largest world owner of movie theaters, having purchased AMC Entertainment. But it gets even “better” in terms of China’s fiscal power through ownership:

In April, The Walt Disney Company China, Marvel Studios and DMG Entertainment of Beijing announced a production deal in which “Iron Man 3” will be co-produced in China. That follows the February announced that a $330 million joint venture between DreamWorks Animation, China Media Capital (CMC) and two other Chinese companies to establish a China-focused family entertainment company, Oriental DreamWorks.

China is a threat, and China is remarkably unstable. There are roughly 500 demonstrations a day in China — primarily covered up and unreported by the press.

And your government pins its hopes on China?

Yes, that’s how stupid and desperate is your current American government.

Under Barack Hussein Obama.

BZ