I often hear people say, Why does US owe so much to China .

It's a combination of things in that country that factor into the staggering dilemma we're facing in the U.S.

First, China is a nation of savers and frugal spenders - complete opposite of modern-day America. Flush with all that cash, China has channeled so much of that money to invest in the U.S., much of it in the form of treasury bills.

Second, this "must-save" herd mentality and behavior of the Chinese people stem from a long history steeped in communism, poverty, uncertainty and distrust. And even while China has emerged as a highly industrious nation, the culture has not advanced to such a point where consumerism - let alone "upgrade-ism" - is aggressively promoted the way it is recklessly instilled here in the U.S. In addition, when the Chinese do spend there's virtually no brand loyalty because the majority of them are far too cost-and price-conscious. They are culturally resistant to spending on non-essentials because they don't own McMansions to stuff junk with. Therefore, they will buy the cheapest item as long as it serves the primary purpose. (That's one reason companies and businesses there thrive on undercutting their competition and we have benefited painfully from that.)

Third, the Chinese people in general simply do not subscribe to the idea of consumer credit or owing money just to finance a lifestyle and high ticket items like spa vacations, boats, second homes, patio furniture, summer camps, etc. They're not at that point yet and, after watching us gorge and explode from a safe distance, they will vow to never walk that same narrow plank. Their money is too precious, too hard-earned and thus, they are far too wise and financially sensible to fall through the trapdoors of non-necessities. From a cultural standpoint, it's one thing to live the good life but being in debt is another. Debt is extremely frowned upon and does not rest well on the general conscious as it shows lack of discipline, self-restraint, modesty, responsibility, accountability and respect for rules and all of which are core valued principles of Chinese ethics. And so, they live and breathe a very simple life slogan: "if you don't have the money, save up for it." Old-fashioned words we should have been living by...

Fourth, China's an export-based economy that did not need to depend on its own people's capacity to spend whereas the U.S. economic model has been based primarily on Americans spending money they do not have, combined with leveraging phantom equity to invest in speculative dust.

Those are just some of the reasons we owe China and why they are weathering this storm relatively unscathed. And if we keep making mistakes and fumbling over ourselves, China will end up owning our banks.