"...All that borrowing could burst what Bill Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., calls a market with “some bubble characteristics.” That isn’t escaping officials in Beijing. China owns $653 billion of Treasuries, and indications are that it’s losing its appetite for U.S. debt. Expect Asia’s second-biggest economy to cut the share of dollars in its $1.9 trillion of reserves, and perhaps sharply. The U.S. is, after all, acting at the expense of its best customer. Just as shareholders abhor companies diluting their stock with new offerings, China’s debt managers can’t be happy with the Treasury’s plans. Along with its Faustian bargain, one wonders if China risks a Madoffian one, too. No, the Treasury isn’t engaged in a massive fraud of the kind allegedly perpetrated by financier Bernard Madoff. Yet the U.S.’s $5.3 trillion government debt arena is looking more like a Ponzi scheme than a market..."