Grand Rapids, MI -- (SBWire) -- 01/28/2011 -- Financial advisor and keynote speaker Dennis Tubbergen watched the state visit of China’s President Hu Jintao with a great deal of interest. While Tubbergen, CEO of USA Wealth Management LLC, usually spends most of his time discussing such timely topics as unemployment and the economy in the U.S., he sometimes explains to the readers of his financial blog and the thousands of financial advisors who receive his monthly newsletter, Smarter Not Harder® , why China is so important to the U.S.

In a recent blog dated January 19, 2011, Tubbergen felt compelled to comment on the recent legislation introduced by U.S. Senators Chuck Schumer, D-N.Y, Debbie Stabenow, D-Mich, and Bob Casey, D-PA. According to FoxNews on January 18, 2011, “The legislation would tighten the reins on Treasury Department decisions to cite a country for unfair currency manipulation, give more power to stiffen penalties on an offending country’s exports and allow for prohibitions on companies headquartered in offending countries receiving federal government contracts.”

According to many analysts, the Chinese Yuan is greatly undervalued, creating an environment in which “Americans are able to buy cheap Chinese imports but makes it expensive for the Chinese and others to buy American exports, choking off demand and hurting American manufacturers.”

“China currently holds about $1 trillion in American federal debt,” explains Tubbergen. “These senators should learn a very important concept called ‘negotiating power.’ In short – we don’t have any.”

Tubbergen goes on to state that with China being a large foreign creditor, and with the United States printing massive amounts of money in the name of economic recovery (which will likely continue to devalue the U.S. Dollar), this legislative initiative, while perhaps well intended, is misguided.

“By continuing to print U.S. Dollars out of thin air - otherwise known as quantitative easing – China’s holdings of U.S. debt will likely be devalued,” notes Tubbergen. “As this continues to occur, China will seek to invest its reserves in other places.”

Tubbergen believes that attempting to pass a law to enforce such a situation given the massive amount of money that the U.S. owes China, and while China has a trade surplus and the U.S. has a trade deficit, is like trying to negotiate terms with a loan shark while he’s in process of getting ready to collect. In other words, according to Tubbergen, the terms “ain’t changing.”

Senator Shumer was quoted in the Buffalo News on January 19, 2011 as saying the Chinese need the U.S. “a lot more than we need them.”

“If that were the case, the United States wouldn’t be losing this battle,’ concludes Tubbergen. “In order to negotiate with China and other U.S. creditors from a position of strength, fiscal responsibility must be restored. That’s where these senators should be focusing.”

Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in the USA Wealth Management Building in downtown Grand Rapids, Michigan. Tubbergen is CEO of USA Wealth Management, LLC and has an online blog that can be viewed at http://www.dennistubbergen.com. His weekly talk show The Everything Financial Radio Show is simulcast on two Michigan metro stations WTKG 1230AM and WBCK 95.3FM and also airs to over 600,000 financial advisors, with recent podcasts available at http://www.everythingfinancialradio.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.