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China is about to get screwed, bought out. QE2 to the rescue. I love being a citizen of THE Super-Powerhouse. America controls the world and the world depends on us. The best of times are clearly still ahead!
Quit worrying. Do you have any idea how trivial that 900 billion really is, especially when it becomes ours again?
About seven years ago it was $16 Trillion. About two years ago, it was about $60 Trillion. Now I believe it is close to $100 Trillion. What happens when China says "We want our money?
Umm, this isn't a on-demand kind of situation. They get paid when the treasuries mature.
The $100 trillion is a hilarious comment. Just shows how misinformed you are.
I'm puzzled where those numbers are coming from. $100 trillion?!
They only thing China can do if they don't want US bonds anymore is try to sell them. If they dump lots of them at once, the value of the dollar will fall. And if the US dollar falls, chinese currency is worth more relative to the US currency... which china doesn't want, as its exports would be more expensive.
In any case, US seems to have very little trouble selling its debt as its interest rate is very low (was negative for a short time last year).
What alot of people dont realize is China can raise its interest rate at any time and literally shut down our entire economy.
Why exactly would they do that to themselves? They already have way too much hot money in China or trying to get in. Companies whose business is denominated in US dollars are almost willing to take a loss on Chinese operations because with economists expecting a continued 5-10% annual strengthening of the yuan it makes good sense to get as many US dollars into the market today and spend them as cautiously as possible, ie. keep a lot of the money set aside for future "development". Very easy, low risk and justifiable way to make a profit. Not to mention what business doesn't want to have Chinese operations anyways.
Increased interest rates just makes the attraction to do something like this more powerful. Its "hot" money on a scale the world has never really seen and it can't end well for China.
What alot of people dont realize is China can raise its interest rate at any time and literally shut down our entire economy.
How so? If the Chinese raise interest rates, as they did back in October it will initially trigger a run on dollars, strengthening the dollar relative to other currencies. That may be counter to the current U.S. strategy of currency devaluation, but would not be an overall bad thing. Even then the spike would be relatively short lived. What makes this a positive is that if the Chinese increase interest rates, it will have the impact of increasing the value of the Yuan, which is exactly what the U.S. wants.
The Chinese economy is red hot and they need to slow it down or they will face severe inflation and a property bubble not unlike what the U.S. went through. They are putting on the brakes (really just tapping them a bit). Of course, that has ramifications as the Chinese economy has helped drive the global recovery. However, whatever short term pain may be felt in the move, would turn into long term gain for the U.S. as long as the Yuan is allowed to gain in value.
The Chinese must allow the Yuan to gain in value in order to reach their goal of long term reasonable and sustained growth. Getting into a currency/trade war with the U.S. would not benefit them in the least. However, I don't think the Chinese will suddenly adjust the Yuan's value as some in the U.S. are calling for. It will be a steady and slow process and the increase in interest rates are a step in that direction.
Do you really think the electorate in a free democratic republic is privy to that information? Nobody knows how much our handlers have indebted us to anybody.
Around election time, ask that question to the two candidates. See what the disparity is in the two answers, both of which can be justified with publicly available data. Your electoral choice is between the candidate who blindly got us there in the first place, or the candidate who doesn't know where we are.
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