Since China owns so much of the US' debt

[JS80]

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Not only that, the US economy is NOT replaceable; the chinese economy is EASILY replaceable by - Taiwan, India, Philippines, Vietnam, South Korea, and countless other Asian countries dying for foreign capital.

 

[IHateMyJob2004]

The problem with China is that if they wanted to, they could financially ruin the US because of what the OP said.

 

[JS80]

Originally posted by: IHateMyJob2004
The problem with China is that if they wanted to, they could financially ruin the US because of what the OP said.

If by that you mean dumping US Treasuries in the open market, then China's financially ruining of the US will simultaneously ruin their own economy long with the rest of the globe.

 

[Ronstang]

Originally posted by: JS80

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Not only that, the US economy is NOT replaceable; the chinese economy is EASILY replaceable by - Taiwan, India, Philippines, Vietnam, South Korea, and countless other Asian countries dying for foreign capital.

Bingo. I love to watch all the Chinese fanbois claiming China will be the dominant superpower in 10-20 years because it is completely laughable. You just wait as global energy prices rise China gets crunched more and more and you WILL see manufacturing come back to the US as it becomes cheaper to make here than ship halfway around the world. It is simply a matter of time. China is exploiting it's one and only comparative advantage and that is cheap subjugated slave labor. China is in catch up mode but it started way too late to have any long term viability and it can't keep up the cheap labor into perpetuity.

 

[bobsmith1492]

Read "The World is Flat" by Thomas Friedman, I think. In one of his chapters he makes the point that the fact of the newly interconnected global economy will essentially prevent major wars between linked countries. Since both countries are out to protect their own welfare, there would be no reason to war with someone who benefits your country economically.

 

[JS80]

Originally posted by: Ronstang

Originally posted by: JS80

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Not only that, the US economy is NOT replaceable; the chinese economy is EASILY replaceable by - Taiwan, India, Philippines, Vietnam, South Korea, and countless other Asian countries dying for foreign capital.

Bingo. I love to watch all the Chinese fanbois claiming China will be the dominant superpower in 10-20 years because it is completely laughable. You just wait as global energy prices rise China gets crunched more and more and you WILL see manufacturing come back to the US as it becomes cheaper to make here than ship halfway around the world. It is simply a matter of time. China is exploiting it's one and only comparative advantage and that is cheap subjugated slave labor. China is in catch up mode but it started way too late to have any long term viability and it can't keep up the cheap labor into perpetuity.

And when China does catch up and their wages start to creep up as their people demand "democracy" and socialist entitlements, foreign investment will just transition into a poor asian country that will be the "next China."

But knowing China's history of serfdom and kingdoms, the ruling class will probably keep the masses down.

 

[ElFenix]

Originally posted by: her209
Why would they? They can just take the money and RUN!

they don't have the money, we do

 

[91TTZ]

Originally posted by: sandorski


If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

Step 1: Borrow billions of dollars from China
Step 2: Purchase advanced weapons with that money
Step 3: When China demands the money back, threaten them with the weapons you just bought with their money.
Step 4: ????
Step 5: Profit..

 

[JS80]

Originally posted by: ElFenix

Originally posted by: her209
Why would they? They can just take the money and RUN!

they don't have the money, we do

they are merely holding pieces of e-paper with letters and numbers on them. suckers! hahaha

 

[K1052]

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Trying to dump it all at once might generate a similar effect as if it were callable. Though by effect I mean a worldwide depression as our debt becomes almost worthless (trillions of $ held domestically and abroad become almost worthless) and we can't float any more of it. Markets and trade crash and bring down our biggest partners in short order (Mexico, China, Canada, Japan, EU nations).

 

[ElFenix]

Originally posted by: bobsmith1492
Read "The World is Flat" by Thomas Friedman, I think. In one of his chapters he makes the point that the fact of the newly interconnected global economy will essentially prevent major wars between linked countries. Since both countries are out to protect their own welfare, there would be no reason to war with someone who benefits your country economically.

which is the whole point behind the EU

 

[Ronstang]

Originally posted by: K1052

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Trying to dump it all at once might generate a similar effect as if it were callable. Though by effect I mean a worldwide depression as our debt becomes almost worthless (trillions of $ held domestically and abroad become) and we can't float any more of it. Markets and trade crash and bring down our biggest partners in short order (Mexico, China, Canada, Japan, EU nations).

For what point? To bring down the world economy and commit suicide in the process? What is this BS scenario crap everyone always comes up with around here? China is the largest economy in the world with the LEAST ability to weather a worldwide depression. Put the crackpipe down. If China is so great there are many flights a day leaving that will carry you there.

 

[UncleWai]

Originally posted by: IHateMyJob2004
The problem with China is that if they wanted to, they could financially ruin the US because of what the OP said.

And US would physically ruin China.
I think it's not good to try to analyze the situation in an economic standpoint. Technically the interest payment alone from the T-bonds would put US in a deep hole. However we can't discredit the hundreds of nuclear missiles lining up.

Neither US nor China wants the other side dead, there's just so much production/profit to be made.

And about the comment that China's purchasing T-bonds is an indicator of how fragile the Chinese economy. That's a very absurd statement. Where else do you suppose China should put the money gained from net export? You don't hide the money in a ditch in the backyard, you invest it.

 

[M2008S]

i believe it comes down to they got people we got technology (aka moab, etc. lolz)

 

[silverpig]

Originally posted by: JS80

Originally posted by: everman

Originally posted by: IAteYourMother

Originally posted by: everman

Originally posted by: IAteYourMother

Originally posted by: yllus
Where did you read that China owns a lot of U.S. debt? There's zero reason to worry about China's economical might in even the long term.

I thought the debt was owned in the massive trade deficit that the US has with China

China owns around a trillion US dollars worth of US government bonds, why would they go to war with someone who owes them a trillion dollars?

I thought that was what I was saying

A trade deficit is created when for example: The U.S. exports $1Billion of goods to China, and imports $2Billion from China into the U.S. That would equal a $1Billion trade deficit.

China owning U.S. gov debt obligations is an investment in the U.S.

So China has $1 billion USD left...hmmm...what do I do with that? Oh, guess what, US Dollars are only accepted in the US of A. I either have to 1) buy American crap or 2) invest in American assets.

3. Buy Euros, devaluing the USD further.

 

[WA261]

You know we have Stealth fighters, nuke equipped, circling capitals of every country that would pose a threat. They would be fuc*ed before they knew what hit them.

 

[JS80]

Originally posted by: K1052

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Trying to dump it all at once might generate a similar effect as if it were callable. Though by effect I mean a worldwide depression as our debt becomes almost worthless (trillions of $ held domestically and abroad become almost worthless) and we can't float any more of it. Markets and trade crash and bring down our biggest partners in short order (Mexico, China, Canada, Japan, EU nations).

First of all, there is enough arbitrage money out there to take advantage of any stupid actions like dumping US treasuries at the wholesale level. Yields might spike to 15% for a bit but it will normalize once all the debt is transferred out of China's portfolio.

Secondly, the US markets are very well regulated and such a sell order would not go through. Trading would halt and China would be helpless.

The only way China can dump their entire portfolio would be to do it incrementally and find private buyers for large block trades. If push comes to shove, world powers would get together to buy their portfolio to prevent their own portfolio of US treasuries would not be degraded.

 

[Ronstang]

Originally posted by: UncleWai
And about the comment that China's purchasing T-bonds is an indicator of how fragile the Chinese economy. That's a very absurd statement. Where else do you suppose China should put the money gained from net export? You don't hide the money in a ditch in the backyard, you invest it.

It isn't absurd at all. China is buying the lowest yield but safest investment on the planet for a very good reason....over 1 billion people it needs to basically take care of due to it's political system of choice. There is a lot of trouble on China's horizon and they are buying a guaranteed income stream.

 

[JS80]

Originally posted by: UncleWai

Originally posted by: IHateMyJob2004
The problem with China is that if they wanted to, they could financially ruin the US because of what the OP said.

And US would physically ruin China.
I think it's not good to try to analyze the situation in an economic standpoint. Technically the interest payment alone from the T-bonds would put US in a deep hole. However we can't discredit the hundreds of nuclear missiles lining up.

Neither US nor China wants the other side dead, there's just so much production/profit to be made.

And about the comment that China's purchasing T-bonds is an indicator of how fragile the Chinese economy. That's a very absurd statement. Where else do you suppose China should put the money gained from net export? You don't hide the money in a ditch in the backyard, you invest it.

They are certainly not investing in their own economy, they are investing it in US assets! What does that tell you?!?

 

[Ronstang]

Originally posted by: JS80

Originally posted by: UncleWai

Originally posted by: IHateMyJob2004
The problem with China is that if they wanted to, they could financially ruin the US because of what the OP said.

And US would physically ruin China.
I think it's not good to try to analyze the situation in an economic standpoint. Technically the interest payment alone from the T-bonds would put US in a deep hole. However we can't discredit the hundreds of nuclear missiles lining up.

Neither US nor China wants the other side dead, there's just so much production/profit to be made.

And about the comment that China's purchasing T-bonds is an indicator of how fragile the Chinese economy. That's a very absurd statement. Where else do you suppose China should put the money gained from net export? You don't hide the money in a ditch in the backyard, you invest it.

They are certainly not investing in their own economy, they are investing it in US assets! What does that tell you?!?

Exactly.

 

[JS80]

Originally posted by: silverpig

Originally posted by: JS80

Originally posted by: everman

Originally posted by: IAteYourMother

Originally posted by: everman

Originally posted by: IAteYourMother

Originally posted by: yllus
Where did you read that China owns a lot of U.S. debt? There's zero reason to worry about China's economical might in even the long term.

I thought the debt was owned in the massive trade deficit that the US has with China

China owns around a trillion US dollars worth of US government bonds, why would they go to war with someone who owes them a trillion dollars?

I thought that was what I was saying

A trade deficit is created when for example: The U.S. exports $1Billion of goods to China, and imports $2Billion from China into the U.S. That would equal a $1Billion trade deficit.

China owning U.S. gov debt obligations is an investment in the U.S.

So China has $1 billion USD left...hmmm...what do I do with that? Oh, guess what, US Dollars are only accepted in the US of A. I either have to 1) buy American crap or 2) invest in American assets.

3. Buy Euros, devaluing the USD further.

OK, so china trades USD for Euros, US dollars still have to be invested or spent in the US by the new holders (or just kept in a bank account doing nothing).

 

[idiotekniQues]

Originally posted by: Ronstang
They couldn't beat us in a war anyway.

cause we are doing so well in iraq

 

[K1052]

Originally posted by: JS80

Originally posted by: K1052

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Trying to dump it all at once might generate a similar effect as if it were callable. Though by effect I mean a worldwide depression as our debt becomes almost worthless (trillions of $ held domestically and abroad become almost worthless) and we can't float any more of it. Markets and trade crash and bring down our biggest partners in short order (Mexico, China, Canada, Japan, EU nations).

First of all, there is enough arbitrage money out there to take advantage of any stupid actions like dumping US treasuries at the wholesale level. Yields might spike to 15% for a bit but it will normalize once all the debt is transferred out of China's portfolio.

Secondly, the US markets are very well regulated and such a sell order would not go through. Trading would halt and China would be helpless.

The only way China can dump their entire portfolio would be to do it incrementally and find private buyers for large block trades. If push comes to shove, world powers would get together to buy their portfolio to prevent their own portfolio of US treasuries would not be degraded.

They could cease buying at the same time as trying to sell off, I wonder if the slack could be picked up enough. Japan would certainly do it's damndest since they hold so much already.

 

[JS80]

Originally posted by: K1052

Originally posted by: JS80

Originally posted by: K1052

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Trying to dump it all at once might generate a similar effect as if it were callable. Though by effect I mean a worldwide depression as our debt becomes almost worthless (trillions of $ held domestically and abroad become almost worthless) and we can't float any more of it. Markets and trade crash and bring down our biggest partners in short order (Mexico, China, Canada, Japan, EU nations).

First of all, there is enough arbitrage money out there to take advantage of any stupid actions like dumping US treasuries at the wholesale level. Yields might spike to 15% for a bit but it will normalize once all the debt is transferred out of China's portfolio.

Secondly, the US markets are very well regulated and such a sell order would not go through. Trading would halt and China would be helpless.

The only way China can dump their entire portfolio would be to do it incrementally and find private buyers for large block trades. If push comes to shove, world powers would get together to buy their portfolio to prevent their own portfolio of US treasuries would not be degraded.

They could cease buying at the same time as trying to sell off, I wonder if the slack could be picked up enough. Japan would certainly do it's damndest since they hold so much already.

Which is what has been happening for the last several years. Yet yields are at historic lows (low bond yield = high bond price).

 

[K1052]

Originally posted by: JS80

Originally posted by: K1052

Originally posted by: JS80

Originally posted by: K1052

Originally posted by: Ronstang

Originally posted by: sandorski
They might not need to.

Those who rely on this idea to dismiss possible war with China(China being the agressor) are really deluding themselves and just setting themselves up for a fall. It assumes that China views Wealth/Economy exactly how the US views them. A rather huge leap if you look at recent Chinese history and its' willingness to Dictate to its' citizens with Tanks. A system like China's could simply allow the Economy to collapse, if it suits their purpose.

If the US wants security, it needs to structure its' economy in such a way that 1 foreign power doesn't have the ability to cause it to collapse, because you never know when they might choose to do just that.

China is in no position to cause the US economy to collapse. I don't know where you people get this crap but the US government issued debt is not callable. China buying US government debt is an investment in the future and it says a lot more about the fragility of the Chinese economy than that of the US.

Trying to dump it all at once might generate a similar effect as if it were callable. Though by effect I mean a worldwide depression as our debt becomes almost worthless (trillions of $ held domestically and abroad become almost worthless) and we can't float any more of it. Markets and trade crash and bring down our biggest partners in short order (Mexico, China, Canada, Japan, EU nations).

First of all, there is enough arbitrage money out there to take advantage of any stupid actions like dumping US treasuries at the wholesale level. Yields might spike to 15% for a bit but it will normalize once all the debt is transferred out of China's portfolio.

Secondly, the US markets are very well regulated and such a sell order would not go through. Trading would halt and China would be helpless.

The only way China can dump their entire portfolio would be to do it incrementally and find private buyers for large block trades. If push comes to shove, world powers would get together to buy their portfolio to prevent their own portfolio of US treasuries would not be degraded.

They could cease buying at the same time as trying to sell off, I wonder if the slack could be picked up enough. Japan would certainly do it's damndest since they hold so much already.

Which is what has been happening for the last several years. Yet yields are at historic lows (low bond yield = high bond price).

China's buying has slowed, IIRC, but not stopped.