US Secretary of State Hilary Clinton has finished her tour of Asia with a speech in Hong Kong in which she reassured Asian and world’s financial markets that, despite the huge national debt, the US economy is still strong.
"For more than a century of growth, the American economy has repeatedly shown its strength, its resilience and its unrivalled capacity to adapt and reinvent itself. And it will keep doing so," Clinton told the American Chamber of Commerce as cited by the Associated Press.She said she has no doubt an agreement to resolve the nation's debt-ceiling crisis will be reached before the deadline on August 2. She also urged Asia to support market growth with open and fair economic policies.Clinton’s speech in Hong Kong concluded her 12-day diplomatic tour that has focused on Asia for the past week. Before the speech, Clinton met senior officials, including Hong Kong's chief executive Donald Tsang.Clinton is expected to return to Washington later on Monday, after the talks with Chinese State Councilor Dai Bingguo.China is the largest foreign holder of US treasury bonds and, according to investment and financial analyst Martin Hennecke, export is the main reason China continues to buy US treasury bonds and supporting its debt growth.“The Chinese government has a better understanding than most Western leaders where this thing is heading,” Hennecke told RT. “I think they are simply buying time to develop their own consumer market. And then when that is ready, I think, they will probably deal with the fall or sovereign national bankruptcy of the United States.”“We expect a major sovereign debt crisis from the major Western countries,” he added. “And we suggest that investors should stay out of that region and look for Asia, look for gold and silver commodities.”While the Republicans and Democrats in the US have until next week to strike a deal, investor and author Jim Rogers believes there will be some kind of publicity stunt so that each side will seem to have won. “There will be some kind of deal,” Rogers told RT. “They will continue to stay in business; America is not going out of business next week, I assure you.”However, he has no doubts America will someday default.“There is now way America can ever pay off its debt,” he said. “It will either inflate the money away, or it will change the rules, it will do something to default if by another name.” Rogers believes the only way out of this situation is to cut expenses massively. “The only way out is to take an axe…no, you have to take a chainsaw to spending in America and cut it very dramatically,” he said. “Because the creditors – China, Russia, other people – are starting to say ‘We are not going to lend you any more money, shape up!’”The US failed to cut its spending for decades, choosing instead to accumulate debt. “It is always easier to the politician to go and say, ‘I will give you anything you want, let me write you a check,’” Rogers said. “That’s how you get elected, that’s how you get votes.”“As long as you can either earn the money, or borrow the money or print the money, you can get away with it. But now we are coming to the end of the line,” he concluded.