China's war of words escalates--and with its continuing military buildup, the long-term implications ain't good

Hey, I love Mike Shedlock's work at Global Economic Analysis, but his advocacy for a Ron Paul-George McGovern national security posture is naive, to put it kindly. Exhibit 9,305: The threat of China’s aircraft carrier. And Exhibit 9,306: China's rhetoric on its investments in U.S. debt grows ever more ominous.

The U.S. may be on its way to default on its debt despite the U.S. government's ability to print more money, a Chinese think tank researcher said Monday.

There is no guarantee for sovereign debt, which increases the risks the lenders face, said Wang Tianlong, a researcher at the China Center for International Economic Exchanges, a think tank supervised by the country's economic planner, adding that the issuer could be more careless in using the loans.

In the short term, the U.S. doesn't have much ability to reduce its deficit, Wang said in an opinion piece published in Securities Times. He added that the U.S. lacks the political system to guarantee that it will not default on its debt.

There is also no way to punish the issuer country if it falsifies its accounting and there is no way to restructure the issuer either, Wang said.

Wang's comments come after the U.S. Vice President Joe Biden said Sunday the U.S. "never will default" on its government debt and reassured Beijing that Chinese investments in the U.S. are safe.

But I'm sure China's massive military buildup is only motivated by the best of intentions.