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This is just a bluff to make sure the US raises the debt ceiling.
China is the world's biggest holder of US Treasury notes. The last thing they would want was for the US dollar to lose its place as the world's reserve currency. If that happened, the value of those nots would plunge. That would be devastating for China.
China, Russia, Arab countries, and certain European countries, have been trying to stop the US dollar from being the worlds reserve currency/oil currency for many, many years.
And China wants it to happen,
"China has the second largest economy on the face of the earth, and the size of the Chinese economy is projected to pass the size of the U.S. economy by 2016 [and projected to become three times larger than the U.S. economy by the year 2040 by at least one economist. [As such,] China is sitting there and wondering why the U.S. dollar should continue to be so preeminent if the Chinese economy is about to become the number one economy on the planet."
"China, and other emerging powers such as Russia, have been quietly making agreements to move away from the U.S. dollar in international trade over the past few years [and, as such,] the supremacy of the U.S. dollar is not nearly as solid as most Americans believe it to be."
A government has leaders (its government officials), it takes in income from tax revenue, it has expenses, it sometimes has debt, it cares for its citizens, and it protects its citizens.
Is the above statement inaccurate?
A household has leaders (its parents), it takes in income from working, it has expenses, it sometimes has debt, it cares for its family members, and it protects its family members.
Is the above statement inaccurate?
Both of the above statements are 100% accurate, and yet they are 100% the same, except for the following changes,
government/household
government officials/parents.
tax revenue/working.
citizens/family members.
In reality a household and a government are (very) much alike.
Its ironic conservatives manage expenses in their personal lives better than anyone. But when they get into government they cut taxes and create deficits and debt, they overspend on the military, they don't care about things like healthcare costs, and then they wreck the whole government. Then they blame the mess they make on the democrats.
Ignorance of our money system certainly crosses party lines.
The difference is that the Federal Gov't can create money, and this gives it very special powers and strength. For instance to help bolster an economy in recession. More importantly, money creation allowed the US to quickly increase GDP to finance the early WW2 years activity. And as a result of that war, the US and its USD rule throughout the world. A world reserve currency cannot be had through ordinary personal or conventional balance sheet means.
Yes you cheer on the enemies of the US. You think like a liberal.
The Chinese are not a bunch of "corporate propaganda Fox news followers", and I cheer (any) country that is not in a corporate cult.
Examples,
97% of climate scientists say "man made global warming is happening", and these scientists are scared as sh--. Global warming could stop deep ocean currents and f--- over this whole planet. But the Fox news followers say "global warming is not happening" to protect the corporate profits of ExxonMobile and GE.
Are the Chinese in a corporate cult to destroy this whole planet? Hell no, the Chinese are with the rest of the world to do something about global warming, and I cheer it.
Hariburton CEO Dick Cheney and CEO Donald Rumsfeld (with the support of Fox news followers) just attacked Iraq for the Haliburton corporation, and they killed 100,000+ innocent Iraqi people.
Do the Chinese approve of this? Hell no they hate, and I cheer them for it.
The Fox news cults final goal is to end all welfare for the poor, and end all government assistance for the middle class, while they fight to give billionaires 0% federal tax rates with 0% tax rates on capital gains.
Do you think the Chinese want to say f. you to their poor and their middle class, and then give Chinese billionaires 0% tax rates? Hell no, and I cheer it.
I can post 2,000+ lies that the republican CEO's tell Americas republicans, while the corporate Fox jocks flip their brains and tell them the democrats are lying.
Do Chinese CEO's and CEO Chinese government officials tell their people 1,000's of lies and flip their brains? Hell no, and I cheer them for it.
I will cheer (any country) that does not share the Fox news corporate agenda (any country.)
China looks to lose a trillion bucks if we go down. They would pay that gladly if they got their currency to the top of the pole.
China does NOT want their currency at the top of the pole. They've been devaluing the yuan for DECADES. As long as their currency is undervalued, they have an advantage exporting their goods. And not only do they NOT want to lose that advantage, if they lost that advantage, it would devastate their economy.
The Chinese economy appears healthy. They have a huge population of consumers. And by keeping the yuan artificially low, that huge population for the most part can only afford to purchase Chinese goods. If the yuan goes up in value, not only will the prices of Chinese goods go up worldwide, but those prices would go up inside China. That kind of inflational blow to China's domestic economy would be devastating when combined with increased competition abroad when their goods are actually sold at real value. The Chinese economy is really quite fragile, and they are under pressure already by a workforce demanding the same things that American workers demanded one hundred years ago. Unions transformed the American workplace. And China's labor force isn't ignorant of how that was achieved.
So this is not any major portion of the world, which is quite set into USD as the currency of choice.
But no doubt moving forward there will be more participation in the Yuan. Just not overnight, and more likely over a 10 year to a generation time frame. Plenty long enough for all involved to rebalance portfolios and investments along with adjusting currency flows.
China is one of our major trading partners. It should be no surprise that in the future the US supplies more oil to China. And by then we might have some use for Yuan.
China does NOT want their currency at the top of the pole. They've been devaluing the yuan for DECADES. As long as their currency is undervalued, they have an advantage exporting their goods. And not only do they NOT want to lose that advantage, if they lost that advantage, it would devastate their economy.
The Chinese economy appears healthy. They have a huge population of consumers. And by keeping the yuan artificially low, that huge population for the most part can only afford to purchase Chinese goods. If the yuan goes up in value, not only will the prices of Chinese goods go up worldwide, but those prices would go up inside China. That kind of inflational blow to China's domestic economy would be devastating when combined with increased competition abroad when their goods are actually sold at real value. The Chinese economy is really quite fragile, and they are under pressure already by a workforce demanding the same things that American workers demanded one hundred years ago. Unions transformed the American workplace. And China's labor force isn't ignorant of how that was achieved.
This is all true IMO. China is essentially today at a similar point as the US pre-WW2. In fact their current per capita GDP is around our early 1930's as I recall. With the Depression and WW2 the US began to see many social reforms, such as job related healthcare benefits, SS and such. Over time the Chinese people are bound to make the same demands on their Gov't and economies. Especially as they inevitably head towards a more consumer oriented society. And then their costs of production will rise, and their currency will appreciate if left to more typical external forces. Economic tides may turn in a generation, and maybe more manufacturing and jobs will head back to the US.
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