Our First Podcast: 'Brad Setser Explains The China Thing' : Planet Money In Planet Money's first ever podcast, an economist revealed what keeps him up at night about Chinese investments. Talk about timing.

Our First Podcast: 'Brad Setser Explains The China Thing'

At a September 2008 recycling drive in Brooklyn, Chinese goods piled up. Bob Sacha hide caption

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Bob Sacha

By Laura Conaway

Call it star-crossed or star-kissed: Planet Money so happened to launch the day the U.S. government announced it was taking over Fannie Mae and Freddie Mac to save them and the rest of the economy. The news broke on Sept. 7, 2008, and the next day we published our first podcast. From the sound of it, I'd say Adam Davidson recorded it by himself at home. You couldn't even find us on iTunes yet. Adam says he thinks he was the sole person who downloaded this first edition. Listening again, I'm stunned at how relevant it remains.

Here's that podcast with guest Brad Setser above, and its blog entry after the jump:

Debt, to most of us, is something you pay. But to creditors, it's also something you sell. Mortgage agencies like Fannie Mae and Freddie Mac issue so-called mortgage-backed securities to investors -- including, notably, China. Roughly put, we buy tons of Chinese goods, and the Chinese loan us the money back through securities so we can buy more.

The numbers involved here are enormous, billions mounting into trillions. Brad Setser, an economist with the Council on Foreign Relations, has spent the last years obsessively researching China's buying of American debt.

What scares him is the idea that China would stop buying the debt -- meaning it would stop financing American mortgages and our general standard of living. An extra jolt: Setser says the Chinese can't go on buying this way forever.

He explained this all to us in a way I could almost completely understand. It's so good, I'm going to listen twice (click above or download).