It's designed that way, but looks are very deceptive. Obviously it works on some people, but when marveling at the modern China, keep in mind it's run by people who are good at keeping secrets and have a vested interest is presenting China to the world as something other than how most of us view it. But keep in mind that most of that is done by combining the riches of their huge population base, at the expense of the parts of the country tourists don't see. China itself might have a decently large amount of money, but the Chinese people themselves aren't doing so hot. At the bottom they have a terrible GDP per capita, and even at the top...a list of the 500 richest people in the world includes only a handful from China, and ones from China itself (as opposed to Hong Kong) don't even break the richest 300 people.
China might be doing OK (although that's debatable), but calling the "Chinese" themselves rich is ridiculous...no matter how many people they've fooled with their Olympic-style show-and-tell.
They really don't.
Man, some of you people in this thread need to take an economics class or something. When it comes to debt and assets on the nation state level, it's not like the bank holding the mortgage to your house. Hell, it's not even like that when you get into deals involving large businesses.
Given the direction of our trading patterns, it makes a lot of sense for the Chinese to own dollar based financial instruments. But at the end of the day, we're the ones with the money doing the buying, and while we're pretty co-dependent economically speaking, any trading ban, for example, would hurt the Chinese FAR more than us. So they own T-bills, but they won't do them much good if we're not buying anything from them. It's not like they can come and repossess the 49ers or something...
We're supporting them, not the other way around. You're right that neither of those scenarios is particularly likely, but there is a reason China is asking us to look out for their economic interests, and not the other way around.
Who said we're basing our decision on what's best for the Chinese? All I see is us expressing concern about our economic relationship with China, and the Chinese asking us to CONSIDER their side of the issues.
Dangerous stuff there :roll:
China would utterly destroy their country if they attacked the dollar systematically. Their goods would instantaneously become so expensive as to completely eliminate their largest consumer. At the same time they would lose trillions in capital as they would have to dump the amounts on the market, keep in mind, there has to be a BUYER on the other side of the trade.
If they wanted to do that, I'd say fuck'em and buy up the treasuries ourselves and retire them. That'd triple screw them.
Overnight they'd end up with a revolution on their hands. The rulers there know this very well, that's why it'll never happen.
I've been to China within the last two years, L.A. within the last two months, and TJ within the last two days and no... no it doesn't.
Think about that for a sec, LK. Buy up the treasuries with what? More US dollars? From where- thin air? That's like pouring gasoline on a fire...
We certainly don't have sufficient foreign currency reserves to defend the dollar against attack, if it comes to it. We're using our position as the world's reserve currency rather abusively, in an extortional manner, as you've partially described.
The Chinese certainly don't want the value to plummet, and will work to prevent it, as you've described, but there's a point where sharp businessmen recognize that they need to cut and run, minimize their losses. We need to make sure they don't find themselves in that position is all I'm trying to say...
"Attacking" the dollar, or even "cutting and running" would be pretty stupid for the Chinese. A sharp businessman doesn't cut off his nose to spite his face...
You're kidding right?
Their rulers are the very same ones in bed with the mega execs here.
Hell some of them post in here even.
They'll all be sipping Margaritas on the Morroccan beach after they let the U.S. and China implode. They don't care.
Capt Caveman
Lifer
- Jan 30, 2005
- 34,543
- 651
- 126
:laugh: Please don't post when you're just making stuff-up and don't even know what you're talking about.
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