Moral Outrage
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A clear message to the world’s largest debtor from its largest creditor

As President Barack Obama prepares to depart for his first Asia trip, Chinese premier Wen Jiabao is urging the U.S. to keep its deficit to an “appropriate size,” a clear message to the leader of the world’s largest debtor nation from its largest creditor.

China is the largest holder of U.S. government debt and has invested an estimated 70% of its more than $2 trillion stockpile of foreign-exchange reserves (the world’s largest) in dollar assets, Reuters reports.

Regardless of whether or not China chooses to unpeg its reminbi from the dollar, longer term the U.S. must come to terms with its deficit structure.

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