(1) Top 2 Oil Consumers in the World (Source):
U.S.: 20,730,000 bbl/day
China : 6,534,000 bbl/day
(2) The Dollar to the Chinese Yuan (Source):
March, 2003: 1 Yuan = 0.120192 USD
March, 2008: 1 USD = 0.141401 Yuan
(3) Of the $9T (that's $9,000,000,000,000) US debt, $5T is financed through treasury securities (as of 2007) (Source)
(4) The Dept. of Defense spent $666B in 2007 (Source)
(5) Top 5 Foreign Holders of US Treasury Bonds (Apr. 2008) (Source):
Japan: $592.2B
China: $502B
UK: $251.4B
Oil Exporters: $153.9B
Brazil: $149.5B
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(2)
March, 2003: 1 USD = 0.926 EUR
March, 2008: 1 USD = 0.658 EUR
While here is not a hard yuan-dollar peg, the Chinese CB sets a daily parity base, with a 1% up/down float range. I think it's obvious that the yuan is intentionally undervalued to the USD.
(3) The scary thing about the other $4T is that it's owed to the SSA/Medicare Trust Funds. This year Medicare blew through its surplus; negative outlays come directly from the budget. In 2010, Social Security becomes cash-flow negative, and the US government has to (1) borrow from the public or (2) monetize the deficit. (Source). Not going to be pretty, especially given the economic landscape.
(4) It's difficult to determine the change in the Defense spending without Iraq, but the amount in 2000 was ~$270B (link). Freeing up the Iraq costs will help, but from the original link, spending on Medicare and SS dwarf the defense budget, especially given the growth projections for the entitlements.
(5) Treasuries are only one aspect of the foreign exchange surplus. Although China does not release official numbers, the amount is estimated at about $1.7 trillion (surpassing Japan), mostly in US denominated instruments (e.g. dollars, t-bills, federal/corporate bonds). Ironically, the US needs Chinese capital inflows, because we sure don't have the money, provided we do something productive with it. What we don't want is China using those reserves to "colonize" South America and Africa, which may be too late. (Source)
All in all, this is going to make for interesting times.
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