"China expresses worry over its U.S. assets"

[bamacre]

http://news.yahoo.com/s/nm/200...3/ts_nm/us_china_wen_8

And why should China keep loaning us money when we pay it back devalued?

The premier said Beijing expected to see results from President Barack Obama's economic recovery plan but expressed concern that massive U.S. deficit spending and near-zero interest rates would erode the value of China's huge U.S. bond holdings.

China is the biggest holder of U.S. government debt and has invested an estimated 70 percent of its $2 trillion stockpile of foreign exchange reserves, the world's largest, in dollar assets.

"We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries.

"I would like, through you, to once again request America to maintain their creditworthiness, keep their promise and guarantee the safety of Chinese assets," Wen said.

And is this a knock at Greenspan...?

China's central bank weighed in later with criticism of America's "inappropriate" economic policies, including low savings and high consumption, and said the global crisis had its roots in what it called an unchecked issuance of dollars.

It certainly sounds like it.

 

[OCGuy]

The house of cards is going to fall here at some point.

Freeze spending on non-essentials. That is our only way out of this.

 

[alchemize]

/looks for the middle finger asci to China

 

[Modelworks]

What is china going to do if the loans do go bad ? Did we put up a state for collateral that they can take ?
All they can do is refuse any further money.

 

[woodie1]

So if we don't have the money to buy their exports whose is going to be worse off.

 

[PingSpike]

Dear China:

No need to worry, our printing presses will work day and night to send oil tanker loads of freshly printed US dollars to your shores.

You're Welcome,
The United States

 

[OCGuy]

Originally posted by: Modelworks
What is china going to do if the loans do go bad ? Did we put up a state for collateral that they can take ?
All they can do is refuse any further money.

No more credit = no more deficit spending = massive budget cutbacks. Obama would be known as the only liberal to completely kill public funding for social programs. :laugh:


Actually we can deficit spend still by using the printing presses. But then we would have $10 gallons of milk. Dave was right!

 

[halik]

Originally posted by: Modelworks
What is china going to do if the loans do go bad ? Did we put up a state for collateral that they can take ?
All they can do is refuse any further money.

How would the loans "go bad"?
Gov't debt is back by full faith and credit of the United States.

They're worried that all these rent policies will ultimately devaluate the dollar and they're sitting on a large pile of dollars. I guess manipulation of your own currency has some downsides also...

 

[OCGuy]

Originally posted by: halik

Originally posted by: Modelworks
What is china going to do if the loans do go bad ? Did we put up a state for collateral that they can take ?
All they can do is refuse any further money.

How would the loans "go bad"?
Gov't debt is back by full faith and credit of the United States.

It is a fiat currency. The "full faith and credit" of the US can turn to vapor in a second.

 

[halik]

Originally posted by: Ocguy31

Originally posted by: halik

Originally posted by: Modelworks
What is china going to do if the loans do go bad ? Did we put up a state for collateral that they can take ?
All they can do is refuse any further money.

How would the loans "go bad"?
Gov't debt is back by full faith and credit of the United States.

It is a fiat currency. The "full faith and credit" of the US can turn to vapor in a second.

Yeah that's why it's such a common occurrence :roll:

The last couple defaults were Argentina and Russia and both of those countries had debt load well north of 100% GDP (160%, 130% respectively)

 

[BoberFett]

Originally posted by: Modelworks
What is china going to do if the loans do go bad ? Did we put up a state for collateral that they can take ?
All they can do is refuse any further money.

And then what happens to our "stimulus" spending?

Hell, what happens to any of our deficit spending?

Government can't borrow money, either taxes shoot up to unbelievable levels or they start cranking out funny money and inflation goes through the roof.

Either way, the American line of credit is almost maxed out.

 

[mooseracing]

Originally posted by: BoberFett


Either way, the American line of credit is almost maxed out.

It's about damn time. Maybe our country will get back on track when we invest in it instead of every other country. It may have taken a few years, but NO country can sustain itself if the exports are lower than the imports.

Screw foreign products, lets start taxing them higher so Americans have the choice for either at a close pricedifferences, then businesses might not be so quick to build on foreign land and would keep jobs here.

 

[Modelworks]

?We have reserved adequate ammunition,? Mr. Wen said, adding that China?s fiscal deficit is under control and the debt level still safe. ?At any time, we can introduce new stimulus,? he said, quoted by Bloomberg News.

Ammunition ? I guess nothing has changed in China, take the stimulus plan and like it or we shoot you .

 

[StageLeft]

Well too bad for them, that's how it goes. If you don't trust the country you lend money to, don't lend it. The government implicitly guarantees this by virtue of the fact it won't default on payments in its own dollars. Whether the gov devalues, well, that's just how it goes.

 

[JS80]

Originally posted by: bamacre
http://news.yahoo.com/s/nm/200...3/ts_nm/us_china_wen_8

And why should China keep loaning us money when we pay it back devalued?

The premier said Beijing expected to see results from President Barack Obama's economic recovery plan but expressed concern that massive U.S. deficit spending and near-zero interest rates would erode the value of China's huge U.S. bond holdings.

China is the biggest holder of U.S. government debt and has invested an estimated 70 percent of its $2 trillion stockpile of foreign exchange reserves, the world's largest, in dollar assets.

"We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries.

"I would like, through you, to once again request America to maintain their creditworthiness, keep their promise and guarantee the safety of Chinese assets," Wen said.

And is this a knock at Greenspan...?

China's central bank weighed in later with criticism of America's "inappropriate" economic policies, including low savings and high consumption, and said the global crisis had its roots in what it called an unchecked issuance of dollars.

It certainly sounds like it.

The irony is they are the ones who kept the yuan artificially cheap. Fuck them we'll keep printing money and send them dollars and they can hoard it while we enjoy our shit. Fuck them if they don't want to reciprocate the trade. And when the Treasuries come due we'll give them a big finger and inflate the dollar.

 

[Dari]

Seeing how the Chinese government got screwed by investing in America and how China's sovereign wealth funds got screwed by investing in America's financial sector, I saw the other day that there are now Chinese nationals buying American properties at "depressed" prices. These Chinese never fucking learn.

 

[JS80]

Originally posted by: Dari
Seeing how the Chinese government got screwed by investing in America and how China's sovereign wealth funds got screwed by investing in America's financial sector, I saw the other day that there are now Chinese nationals buying American properties at "depressed" prices. These Chinese never fucking learn.

It's their culture. They act seflishly, hoard money, and never spend. And it's reflective in their trade policy. We buy shit from them, yet they don't buy shit from us. It's their own damn fault.

 

[halik]

Originally posted by: JS80

Originally posted by: Dari
Seeing how the Chinese government got screwed by investing in America and how China's sovereign wealth funds got screwed by investing in America's financial sector, I saw the other day that there are now Chinese nationals buying American properties at "depressed" prices. These Chinese never fucking learn.

It's their culture. They act seflishly, hoard money, and never spend. And it's reflective in their trade policy. We buy shit from them, yet they don't buy shit from us. It's their own damn fault.

It's actually more so due to currency manipulation - they buy shit for U.S. and vice versa, but they also buy dollars and sell their own currency.

 

[StageLeft]

Fuck them we'll keep printing money and send them dollars and they can hoard it while we enjoy our shit.

Way to make friends, I loled

 

[Craig234]

Originally posted by: woodie1
So if we don't have the money to buy their exports whose is going to be worse off.

There's a long-term shift where the US is less and less necessary to China. We're critical to them now - not so much later. They'll weigh the cost of investing the US aganst that.

 

[Craig234]

Originally posted by: halik

Originally posted by: Modelworks
What is china going to do if the loans do go bad ? Did we put up a state for collateral that they can take ?
All they can do is refuse any further money.

How would the loans "go bad"?
Gov't debt is back by full faith and credit of the United States.

They're worried that all these rent policies will ultimately devaluate the dollar and they're sitting on a large pile of dollars. I guess manipulation of your own currency has some downsides also...

Inflation.

 

[sandorski]

The way I see it, the attitutde in this thread is completely unwarranted and foolish. China may get fucked if the US does too, but the US still gets fucked in the process. Far worse than it already is. So basically y'all are telling China to STFU or you'll pull them off the cliff with ya. You both splat.

 

[Turin39789]

Originally posted by: sandorski
The way I see it, the attitutde in this thread is completely unwarranted and foolish. China may get fucked if the US does too, but the US still gets fucked in the process. Far worse than it already is. So basically y'all are telling China to STFU or you'll pull them off the cliff with ya. You both splat.

we have better parachutes

 

[Fear No Evil]

I thought Obama fixed the economy?

 

[woodie1]

Originally posted by: Fear No Evil
I thought Obama fixed the economy?

Yes he has, the Chinese haven't gotten the word yet.