Every so often, we here at FactCheck.org get a slew of questions about some huge clandestine shadowy government conspiracy. Here’s the problem with those questions: If it’s a clandestine shadowy government conspiracy, it’s a little hard to confirm or deny absolutely. In fact, that’s what the people who generate these rumors count on. They can say anything they like, and when someone refutes it, they can come back with, "Well, that’s what they
you to believe."
Recently we’ve received such questions about an alleged decision to grant China eminent domain within the United States to secure our substantial debt to that nation. The idea is that if the U.S. failed to make good, China would be empowered to seize any U.S. property it took a shine to.
Chain e-mail: On February 11, Bloomberg Business News reported that China was seeking "guarantees" for its US Government debt (Story Here), and it now appears they got it. Well placed senior sources at the US Embassy in Beijing CONFIRM the formal written agreement was delivered by Secretary of State Hillary Clinton during her recent trip to China.
This means that in the event the US Government defaults on its financial obligations to China, the Communist Government of China would be permitted to physically take — inside the USA — land, buildings, factories, perhaps even entire cities – to satisfy the financial obligations of the US government.
Put simply, the feds have actually mortgaged the physical land and property of all citizens and businesses in the United States. They have given to a foreign power, their Constitutional power to "take" all of our property, as actual collateral for continued Chinese funding of US deficit spending and the continued carrying of US national debt.
We follow and recommend a maxim for situations like this: Consider the source. In this case, the text of the e-mail is drawn from the blog of former radio talk-show host Hal Turner. Turner is a white supremacist and Holocaust denier who has advocated political assassination and violence against judges and senators. A glance through the comments on his entry about China and eminent domain should be sufficient to show what kind of people consider Turner to be a reliable source.
As Snopes.com points out, the idea of selling eminent domain as security on a loan is nonsensical anyway:
Snopes.com: The concept of "eminent domain" in the United States refers to the right of the government to seize private property for public use in exchange for payment of fair market value… Thus the idea of enacting eminent domain as a form of debt repayment or guarantee isn’t logical: It’s akin to a debtor’s offering to settle a $5,000 debt by agreeing to sell his creditor $5,000 worth of jewelry for $5,000 – at the end of the day, the debtor hasn’t given up anything, and his creditor still hasn’t collected anything on his original loan amount.
It is true that China has expressed some concern over the United States’ ability to pay its debts, given the recession and the absymal state of the dollar. Bloomberg reports that China has requested guarantees for its share of the national debt, and quotes an economist at a Chinese national bank saying that the country would require "a guarantee that the U.S. will support the dollar’s exchange rate and make sure China’s dollar-denominated assets are safe" as a prerequisite for any further purchases of U.S. debt. (A currency strategist at a bank in Singapore, the article goes on to report, says that "these comments are some sort of a threat but of course China can never get such a guarantee.") And others have expressed concern about the sheer quantity of U.S. debt held by China in the first place (the country owns $727.4 billion in treasury securities). But it makes no sense for China to request a guarantee in the form of eminent domain, which constitutionally requires fair compensation.