China wants US to Guarantee its Treasuries

[GTKeeper]

For those out there that think China is just going to dominate us, after reading Skoorb's thread on 17.5% decline in exports (and btw, exports account for 40%+ of GDP for China) that is a 7.2% CONTRACTION just for Q1..... should be very intereseting.

Now China wants us to 'Guarantee' nearly 700 billion in treasuries they bought. LOL. Tough shit China.

http://www.bloomberg.com/apps/..._dsDz145J_A&refer=home

 

[dahunan]

Hmm.. tough shit?

All they have to do is Nationalize all US Corporations on their soil and kick them out and take over the assets.. right?

You think we can just steal 1 Trillion dollars and there be no repercussions? That is only allowed to be done to our citizens.. lol

 

[GTKeeper]

Originally posted by: dahunan
Hmm.. tough shit?

All they have to do is Nationalize all US Corporations on their soil and kick them out and take over the assets.. right?

You think we can just steal 1 Trillion dollars and there be no repercussions? That is only allowed to be done to our citizens.. lol

Um, if China does that, they do realize that our d*ck (aka our military) is bigger than theirs, so they wouldn't dare.

2009 will be a ROUGH year, if you can be in a cash / cash equivalent position I suggest you do so quickly. Now, US treasuries are still the best bet for China and whoever else out there. We have to remember that the rest of the world has it much worse than us.

 

[Dari]

Clinton should tell them to fuck off. They must think they're special. There are countless other peoples on Earth holding US Treasuries. If they want to sell and make things worse, let them. Hell, for the long run, it'll probably do us some good.

 

[Fingolfin269]

"Hey yah guys we guarantee your securities!" That wasn't so hard to say now was it.

 

[Red Dawn]

There's nothing like Chinese when they think you aren't going to pay them what you owe them "You pay, you pay!!!!":shocked:

 

[EXman]

Originally posted by: Red Dawn
There's nothing like Chinese when they think you aren't going to pay them what you owe them "You pay, you pay!!!!":shocked:

Reminds me of the Chinese restaraunt that has a penny dish that sign above it reads

You need a penny take a penny JUST ONE PENNY!!!!

While there are probably 60-80 overflowing this dish.

 

[0marTheZealot]

You do know that if China decides that these treasuries aren't worth as much, they could flood the market with all this extra cash and put the US into a huge inflation cycle? Where do you think we are getting the money to do the day-to-day operating of the government? To pay the soldiers? To buy all these fancy new toys? To repair our infrastructure, etc etc? China (and other creditor nations like Norway, Japan, Saudia Arabia) are buying our debt in the hopes that when the bonds come due, we will make good on them. If these countries don't think they can make a buck, then they stop buying up our debt, and the dollar will plunge like a rock.

 

[Genx87]

If they sold them on the open market it would be at a loss and hurt china more than us. Hell we could buy them up and we got a nice % return just for issuing them.

China wont do anything silly. They fuck up their trading relationship with us and their economy shits even worse than it is now. Instead of 17% decline in export it will be 90%.

 

[Dari]

Originally posted by: 0marTheZealot
You do know that if China decides that these treasuries aren't worth as much, they could flood the market with all this extra cash and put the US into a huge inflation cycle? Where do you think we are getting the money to do the day-to-day operating of the government? To pay the soldiers? To buy all these fancy new toys? To repair our infrastructure, etc etc? China (and other creditor nations like Norway, Japan, Saudia Arabia) are buying our debt in the hopes that when the bonds come due, we will make good on them. If these countries don't think they can make a buck, then they stop buying up our debt, and the dollar will plunge like a rock.

[Public Service Announcement] Decoupling Theory has been proven false [/Public Service Announcement]

Cutting off your nose to spite your face isn't very smart...

 

[GTKeeper]

Originally posted by: 0marTheZealot
You do know that if China decides that these treasuries aren't worth as much, they could flood the market with all this extra cash and put the US into a huge inflation cycle? Where do you think we are getting the money to do the day-to-day operating of the government? To pay the soldiers? To buy all these fancy new toys? To repair our infrastructure, etc etc? China (and other creditor nations like Norway, Japan, Saudia Arabia) are buying our debt in the hopes that when the bonds come due, we will make good on them. If these countries don't think they can make a buck, then they stop buying up our debt, and the dollar will plunge like a rock.

Let them flood the market with Ts, see how they come out from the other end on that.

 

[sandorski]

When your next step is off the edge of a cliff, LOLing about it is not the wisest choice.

 

[daveymark]

Originally posted by: Fingolfin269
"Hey yah guys we guarantee your securities!" That wasn't so hard to say now was it.

yep, just like the FDIC "guarantees" your bank deposits...

 

[GTKeeper]

Originally posted by: sandorski
When your next step is off the edge of a cliff, LOLing about it is not the wisest choice.

Well its funny to me because instead of the government grabbing the problem by the balls and doing what needs to be done. I.E nationalization of the shitty banks, cleaning them out and reselling them back to the private sector, we are going to be lolli-gagging around doing absolutely NOTHING to solve the underlying issue. We are taking the EXACT steps we need to take to have a decade long Japan like enviornment right here in the US.

See, if we do 'nothing' I guarantee you we are going to see a depression post 2009 i.e a 10% contraction in GDP which is roughly 1.2 trillion dollars in lost GDP.

 

[StageLeft]

About as realistic as me buying a house and getting insurance from the seller that it won't drop in value. Surely they understand how investments work, don't they? This is the fun thing about government-debt in a government's currency. The gov can literally wash it all away overnight if it so desires. It just wouldn't be as exciting if not for that extra piece of the puzzle!

"Hey yah guys we guarantee your securities!"

True, why not just say it for the hell of it!

"You pay, you pay!!!!"

Oh, no you didn't.

You do know that if China decides that these treasuries aren't worth as much, they could flood the market with all this extra cash and put the US into a huge inflation cycle?

They could, but it's not like a trillion will destroy the dollar, and by doing this anyway they kill their own investment. Considering their economy is about to get put in front a firing squad and the US dollar has gained strength over, say, the Euro quite a bit recently, a trillion in USD is still something nice to have.

 

[PingSpike]

Originally posted by: daveymark

Originally posted by: Fingolfin269
"Hey yah guys we guarantee your securities!" That wasn't so hard to say now was it.

yep, just like the FDIC "guarantees" your bank deposits...

So you're saying we should compromise and guarentee all of China's teasury holdings up to $100K? That seems good to me but I'm not sure its the compromise China is looking for.

 

[BoomerD]

Originally posted by: 0marTheZealot
You do know that if China decides that these treasuries aren't worth as much, they could flood the market with all this extra cash and put the US into a huge inflation cycle? Where do you think we are getting the money to do the day-to-day operating of the government? To pay the soldiers? To buy all these fancy new toys? To repair our infrastructure, etc etc? China (and other creditor nations like Norway, Japan, Saudia Arabia) are buying our debt in the hopes that when the bonds come due, we will make good on them. If these countries don't think they can make a buck, then they stop buying up our debt, and the dollar will plunge like a rock.

Should the Chinese do such a stupid thing, I think the backlash would be nasty.

I'd be willing to bet that if the USA didn't go into some type of protectionist mode over such an action, heavy tarriffs and the like, the public outcry would be deafening...and there would be calls to stop buying ANYTHING made in China.
Why would you do business with a nation that intentionally does your economy harm?

Would that be bad for our economy until it adjusted? Sure, but as in the past, the corporations would just ramp up manufacturing here, (or in other third-world shitholes that could be exploited) and pick up the slack in cheaply made goods.

 

[Cellulose]

This may be BS...

...but doesn't America donate hundreds of billions of "charity" dollars to China each year?

 

[theeedude]

China can pound sand. If they stop buying treasuries, the fed will step in and we will devalue the dollar, and they will get pounded on their treasury investment and their exports at the same time. They got on this currency manipulation treadmill, well now they'll have to run at whatever speed we set it on.

 

[halik]

Originally posted by: GTKeeper

Originally posted by: 0marTheZealot
You do know that if China decides that these treasuries aren't worth as much, they could flood the market with all this extra cash and put the US into a huge inflation cycle? Where do you think we are getting the money to do the day-to-day operating of the government? To pay the soldiers? To buy all these fancy new toys? To repair our infrastructure, etc etc? China (and other creditor nations like Norway, Japan, Saudia Arabia) are buying our debt in the hopes that when the bonds come due, we will make good on them. If these countries don't think they can make a buck, then they stop buying up our debt, and the dollar will plunge like a rock.

Let them flood the market with Ts, see how they come out from the other end on that.

You're really clueless man,
the reason why we do business with china is because it's MUTUALLY BENEFICIAL. That is if either party walks away from the table (china puts inflationary pressure on US, US puts tarriffs on china, quid pro quo goes on) we'll end up in great depression. Protectionism is EXACTLY what happened in 1930s.

Also take your 'america fuck yeah' attitude back to early 2000s, those days are over.

 

[jackschmittusa]

If the U.S. ever defaults on its notes to anybody (China included), it's "game over". The government would be hard pressed to sell any more notes without putting up collateral.

What kind of collateral would you need to put up for a trillion dollars? Yellowstone NP?

 

[soccerballtux]

Originally posted by: dahunan
Hmm.. tough shit?

All they have to do is Nationalize all US Corporations on their soil and kick them out and take over the assets.. right?

You think we can just steal 1 Trillion dollars and there be no repercussions? That is only allowed to be done to our citizens.. lol

Why do you think we spend so much on defense.....

 

[johnbrown1776]

Originally posted by: dahunan

All they have to do is Nationalize all US Corporations on their soil and kick them out and take over the assets..

Chavez did it.

 

[soccerballtux]

Originally posted by: jackschmittusa
If the U.S. ever defaults on its notes to anybody (China included), it's "game over". The government would be hard pressed to sell any more notes without putting up collateral.

What kind of collateral would you need to put up for a trillion dollars? Yellowstone NP?

The US will never default on its notes, the Fed can just buy new Treasuries from the US Treasury, give the Treasury the cash, and then the Treasury can pay out the interest on those bonds. IE, they would just print cash.

 

[babylon5]

Originally posted by: soccerballtux

Originally posted by: jackschmittusa
If the U.S. ever defaults on its notes to anybody (China included), it's "game over". The government would be hard pressed to sell any more notes without putting up collateral.

What kind of collateral would you need to put up for a trillion dollars? Yellowstone NP?

The US will never default on its notes, the Fed can just buy new Treasuries from the US Treasury, give the Treasury the cash, and then the Treasury can pay out the interest on those bonds. IE, they would just print cash.

This is the "too big to fail" model