World turns its attention on the U.S. debt problem.

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Updated: August 4, 2011 4:20PM

On Tuesday, China’s Foreign Ministry dealt the United States another humiliation one day after Standard & Poor’s issued its warning on the nation’s debt.

China urged the U.S. to take “responsible” measures to protect investors in its debt.

The warning put the United States in the same position Greece and Portugal face in the European Union, where stronger nations urge fiscal restraint on profligate debtors.

Since China is reported to hold at least $2 trillion of our Treasury debt, it has a big stake in the U.S. continuing to pay interest on it.

Also Tuesday, Treasury Secretary Timothy Geithner played down the S&P warning, saying “there is no risk” that the U.S. will lose its AAA credit rating. He predicted Congress would exercise discipline.

The global markets placed their own judgment on America’s debt issue. Gold briefly traded at $1,500 per ounce before settling at $1,495.10 an ounce, up $2.20. Gold’s rise was a signal that the world continues to lose faith in the future value of the U.S. dollar.

The world has been tolerant of other countries’ debt problems because they are not the world’s reserve currency. The world’s markets will no longer be satisfied with soothing words. Actions will be watched closely. And that’s the Savage Truth.