I assume you really don't know anything. I don't have time to educate you. Google realism and international relations.
how does a super power such as the USA finance its wars (Iraq, Afghan, etc.) as well as the day-to-day operation of running its government ? The US borrows $$$ from China. what if China stops lending $$$ the US? what would happen to the US economy, the global economy ?
China buys bonds from the US. If China stopped buying US bonds, other people would buy the bonds. Interest on the national debt is not that high all things considered.
the dizzying height of ignorance !!! who would these people be ??? China's Treasury has been the last resort for the US to borrow $$$$. the fact that US has to borrow from China means that no one else (US allies like Japan UK, Euro, Canada, etc.) has that much liquidity ($$$$$ available in their national treasury) to lend to the US i know that it is beyond your mental capacity, think, that is if you are capable, what would happen to the US economy should China stop lending $$$ to the US, insofar as the impact on interest rate ? It will un-do everything that the Fed has done to keep interest rate extremely low, as a means to stimulate the US economy
you ignorance resonnates. that pie charts is a static snap shot as of June 2008. what it doesn't show is the trend for each of of these ownership category over the past 20 years. The "Fed and US intraGov Agencies" used to own more that 60%, now it is less than 50% and trending down. The "foreign and international" category used to be less than 20%, it is now >27% and growing within this category, China used to be 0, nows it is ahead of Japan, Taiwan, UK, Euro and the Middle East
China is using its capital account surplus (from a centrally planned export economy) to buy US treasuries and you are using that as an example as why % ownership is decreasing amongst other parties. But (channeling MFW here) if China stops buying the Treasuries and no one steps in to buy them, the interest rate increases. Regardless, China should be investing in its own economy instead of buying US treasuries.
stop shoulding around your ignorance. if China is an economic hoax, what does that make the US economy which borrows $$$$ from the China treasury to finance its day-to-day opeations ??
Oh this is rich. I think I get it. You've actually no idea how light China's "property bubble" is and how severe it is in the US do you? That's why you peddle bullsh1t like China will soon have a US style hard landing huh? Interest report from Amherst. Sent to institutional investors... yesterday. One which you haven't read. Shall I show you the key parts, specifically the one referring to 1st lien, especially prime loans? Courtesy of Laurie Goodman et al at MBS Strategy Group at Amherst. Of course, the pros have known this for quite some time now. Checkout the share prices of REIT's lately? Make no mistakes about it, QE2 is coming. It's already largely priced in the market. And who's gonna pay for QE2? It's not gonna be your American households, state and local governments, domestic insurance companies and mutual funds. And I always got a kick out of the Fed, the US government money printiing branch (oh excuse me, they're private) buying US Treasuries. But then again I could be wrong. I predicted that Lehman Brothers would be bailed out because even the US government is not stupid enough to let them fail. Oops. And then you have the Chinese side. Ever wonder WHY the property prices are "over-price?" It's really simple actually. Because the rapid expansion of real wage (far exceeding the changes in life style) and high savings rate led to a glut of liquidity and real savings among Chinese households. And as the RMB is not freely convertible, their investment options are limited to the domestic stock market and the domestic property market. Usually when one's prices reach so high, people will move money into the other. It wasn't too long ago when the big board in Shanghai was showing 6,0i00 while property prices were dropping from late 2006 to early 2008. Now the index is at 3,000 and property prices are skyrocketing. We've been in this boat before. It happened '91. It happened in '94. It happened in '97 and it happened in '01. Expansion of credit, rising and dropping property prices, you name it. The Beijing and Shanghai "housing bubble" popped several times already. And each time, the Chinese economy just chugged right along. Only idiots such as yourself think they've got a problem. And unless the RMB all of a sudden become freely convertible, it ain't gonna change. Suppose the RMB is to become freely convertible, say tomorrow, you will see a diversification from domestic markets to global equity. But if the RMB were to become freely convertible tomorrow, the inflow of foreign capital and investments would far dwarf the outflows. China's economy will only grow faster.
translation, Azadre is an economic illiterate. other than cutting and pasting articles, he has nothing to offer.
I'm assuming this is a joke of some kind. Did you say, check out the economy of Brazil, Australia, Canada, Sudan, Nigeria, Russia, etc etc etc in the 70's, 80's and early 90's, before China took off and began demanding their resources? It wasn't pretty...
you're right on. that said, in doing so, you've just contradicted your original position that the Chinese economy is a hoax. you've corroborated with my opinion that an action by the Chinese economy, to stop lending $$$ to the US, will have immediate adverse impact on the US economy. how is it possible that a supposed economic hoax can do that ????? the ripple effect of the rising interest rate in the US includes, more foreclosures, more business failures, more job losses.
The US economy has its own fundamental flaws irrespective of China that will not be fixed in the short term. China has an aging problem, we have an uneducated labor problem.
