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China has been slowly divesting itself from US debt. They recently entered a currency agreement with russia. It will happen here in the not to distant future IMO. The goal is to of course get rid of the US dollar as the worlds reserve currency. I would be doing the same thing if I were them. It will mean we can't print money anymore to inflate our way out of debt. When the euro collapses which it is well on it's way China will make their "all in" move I bet.
China needs us far more than we need China. It is a country that is hitting a demographic wall, a country that has been cooking its economic books for years, and a country that facing major, major problems
China facing major, major problems, and we are in the brilliant shape. Obviously.
BTW, America in whole does not benefit from trading with China. On the contrary, it kills our own industries, reduces tax revenue, jobs, and finally, increases our debt. The only winners are TNCs' owners (not even workers).
With the U.S. borrowing $.40 on every dollar from China , what occurs (short term as well as long term) to the U.S. if China says 'no more' ? Just HOW dependent on we on maintaining good relations with China ? Thanks.
China is not the only owner of US Debt, but if the plug would be pulled, it would be instant austerity.
The plug will eventually be pulled, for any number of reasons.
As I pointed out in another thread, US Debt is almost $16 TRILLION and WORLD GDP is $70 TRILLION or about 22% of World GDP. The CBO is projecting a $21 TRILLION Debt by 2022.
World GDP is averaging 4.73% since 2000, and US Debt 9.19% over the same period, meaning at that rate, US Debt will be 1/3 of the World's GDP by 2022.
Anyone who thinks that is sustainable is certifiably insane.
Yes the "involuntary austerity" is coming sooner than most think. Years of spending like drunken sailers has to be dealt with eventually and involuntarily looks to be the only way to go.
With the U.S. borrowing $.40 on every dollar from China , what occurs (short term as well as long term) to the U.S. if China says 'no more' ? Just HOW dependent on we on maintaining good relations with China ? Thanks.
You seem to forget that China is dependent on the United States for a great deal of the consumer goods it exports. Anything that China does to that would seriously destabilize the economy of the United States is a perfect example of "Cutting off your nose to spite your face".
And where was your computer and the keyboard you're pounding on made?
China?
That's what I thought.
So what. We made computers just yesterday Einstein. Hell, we wrote the book. Not China. I remember early computers in the 60s here in DC and the very early internet in Bethesda, Md in the early 80s. Heck, China was still 3rd world in very recent history as far as I'm concerned and anything they make for us now we can take back in a flash. If China ever really jerked our chain (I don't think this will happen) many Amercans would dump their junk in a hurry.
With the U.S. borrowing $.40 on every dollar from China , what occurs (short term as well as long term) to the U.S. if China says 'no more' ? Just HOW dependent on we on maintaining good relations with China ? Thanks.
They won't because they are as dependent on us as we are on them. They loan us money, we buy their cheap goods.
If goods can be produced at lower cost elsewhere, it helps our economy more than it hurts it.
Boycotting China would be terrible for the American economy even if it was done over a long period. That being said, I suppose (as I suggested earlier) that the fact that we purchase so many products made in China is leverage we have in dealings with them.
China is cheaper because we support slave labor, destruction of their environment, which eventually affects us all.
Their water is our water, their air is ours, their polluted food chains are ours.
With this many on the planet, we swap spit.
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