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(Reuters)   China says it's committed to U.S. debt and will ride it all the way to the poor house   (reuters.com) divider line 31
    More: Interesting, U.S. debt, government bonds, Zhou Xiaochuan, head of the state, run-up, political football, yuan, precious metals  
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1582 clicks; posted to Business » on 09 Mar 2010 at 4:06 PM (4 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



31 Comments   (+0 »)
   

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2010-03-09 04:15:48 PM
so it's like living with an ex until the end of a lease?
 
2010-03-09 04:36:00 PM
Well, what else are they gonna do with that money? Invest in the Euro?
 
2010-03-09 04:42:08 PM
Oh yes, we own you round-eyes. Now bring me a beer before I decide to foreclose on your whole white chubby country!

img.newconceptmandarin.com
 
2010-03-09 04:44:35 PM
Ill get you a beer, just don't give me any ofe your Cokes. I have heard ... things.
 
2010-03-09 04:51:34 PM
Translation: Politician's play politics and use rhetoric. When push comes to shove, however, we're businessmen, not stupid.
 
2010-03-09 04:52:17 PM
1nsanilicious: Ill get you a beer, just don't give me any ofe your Cokes. I have heard ... things.

-Ahem-

Things You May Have Heard (new window)
 
2010-03-09 04:54:48 PM
Communist China are liars.
 
2010-03-09 04:56:19 PM
Linux_Yes: Communist China are liars.

no wonder they work so well with corporate America.
 
2010-03-09 05:11:35 PM
Linux_Yes: Communist China are liars.

Lies and Slander!!! China would never lie to gain an advantage. That's like saying their Olympic gymnast are all underage or something.
 
2010-03-09 05:20:21 PM
Senescent Dawn: Well, what else are they gonna do with that money? Invest in the Euro?

I have no doubt that they are well invested in all the major currencies.

I do think that American debt is not as bad as an investment as people make it out to be. And even if it was, just dumping it would be the worst way to get a return out of it.
 
2010-03-09 05:47:41 PM
I love how a communist country owns the US.

But god forbid we trade with those evil commies in cuba.

/wants cuban cigars without having to smuggle them
//not that i've ever done such a thing
 
2010-03-09 06:14:06 PM
So I ponder if China will suffer a severe downturn soon that would warrant a loan from the IMF to prevent contagion from spreading after buying up US bonds and acquiring loans at low interest rates to spur a giant buying binge.

China is going to have a dollar hangover soon.
 
2010-03-09 06:31:27 PM
*Yawn* Boring.

China having no vested interest in sinking the dollar (in fact, quite the opposite) is so much less sexy than half baked internet crackpot theory about inevitable zombie economic apocalypse.
 
2010-03-09 06:32:02 PM
Funk Brothers: So I ponder if China will suffer a severe downturn soon that would warrant a loan from the IMF to prevent contagion from spreading after buying up US bonds and acquiring loans at low interest rates to spur a giant buying binge.

China is going to have a dollar hangover soon.


So, is your slant on this that they are stepping onto a slippery slope? I can certainly see some pretty serious chinks in their financial armor, myself.
/I know.
//Aisle seat.
///Smoking, please.
 
2010-03-09 06:37:31 PM
jso2897: Funk Brothers: So I ponder if China will suffer a severe downturn soon that would warrant a loan from the IMF to prevent contagion from spreading after buying up US bonds and acquiring loans at low interest rates to spur a giant buying binge.

China is going to have a dollar hangover soon.

So, is your slant on this that they are stepping onto a slippery slope? I can certainly see some pretty serious chinks in their financial armor, myself.
/I know.
//Aisle seat.
///Smoking, please.


Excuse me? You agree with my statement?
 
2010-03-09 07:00:21 PM
anyone who thinks China is still Communist is placing symbols over substance.
 
2010-03-09 07:00:40 PM
China's foreign currency reserves (as well as those of Japan and other countires) were accumulated over years of intervening in the foreign exchange market, keeping their currency cheap and boosting the dollar to their preferred exchange rate. I know a lot of Americans don't understand this, but many countries want the value of their currency low, it gives them a huge trade advantage. (In fact, when I read the rantings of armchair economists on Japanese internet forums, they're always saying their government should print up yen like there's no tomorrow!)

In effect, China is like a merchant offering credit to it's best customer. Divesting their reserves from the dollar all at once is an impossibility since such an action would undue all those years of foreign currency interventions WITH INTEREST. Of course it would hurt the US, but crashing the dollar would hurt China even more. We can survive without them, but they make their living by selling to us.

They know this cycle has to end someday but they're too addicted to the fast growth they've achieved through exports. What makes this dangerous is that this economic co-dependency between the US and China is being driven by political decisions made in Beijing (on foreign exchange rates), rather than by the markets. We can only hope they know what they're doing.
 
2010-03-09 07:03:04 PM
Funk Brothers: jso2897: Funk Brothers: So I ponder if China will suffer a severe downturn soon that would warrant a loan from the IMF to prevent contagion from spreading after buying up US bonds and acquiring loans at low interest rates to spur a giant buying binge.

China is going to have a dollar hangover soon.

So, is your slant on this that they are stepping onto a slippery slope? I can certainly see some pretty serious chinks in their financial armor, myself.
/I know.
//Aisle seat.
///Smoking, please.

Excuse me? You agree with my statement?


O, seriously, you mean? Well, maybe. Certainly, the Chinese have a lot invested in keeping the dollar strong, and they're kind of faced with a Hobson's choice - if the U.S. economy tanks into full depression, complete with currency deflation, they'll get that - but lose their biggest market. If, on the other hand, we do recover quickly, the inflationary pressure will be fierce - and no matter how they want not to, at some point they'll have to float the yuan - which is going to really suck for them, to put it mildly. In that scenario too, they would lose a lot of our trade. Their best hope lies somewhere between the two.
So, yeah - actually, I think you stand a pretty fair chance of being right, except about the IMF loan, which I assume was a joke.
The U.S. and China are like two men facing each other in a room ankle deep in gasoline, and armed only with matches. I don't think we have too much choice but to try to play nicely with each other, at this point.
 
2010-03-09 07:29:01 PM
Not like the Japanese who sold their shares when they needed the cash, China will put us first over their own needs...Is that right?
 
2010-03-09 07:40:49 PM
Kanemano: Not like the Japanese who sold their shares when they needed the cash, China will put us first over their own needs...Is that right?

Japan hasn't divested one bit from the dollar (actually, US government debt accumulated through past foreign currency interventions). Even slowly diversifying these reserves would put upward pressure on the yen, which they don't want. Basically, Japan and China have $3.4 trillion in useless IOUs that they can't cash out. All they can do is take the interest earned from maturing securities and use that to buy more debt.
 
2010-03-09 08:44:14 PM
eau de humanite!

/got nothin
//shame to see all that wine spilled
 
2010-03-09 08:44:49 PM
sgnilward: eau de humanite!

/got nothin
//shame to see all that wine spilledshiate, wrong thread
 
2010-03-09 08:56:10 PM
minnesotaboy: Oh yes, we own you round-eyes. Now bring me a beer before I decide to foreclose on your whole white chubby country!



It's 'owlie' (as in an owl), not 'round-eye'. At leasts that's what they called us in Hawaii.
 
2010-03-09 09:34:45 PM
1nsanilicious: Ill get you a beer, just don't give me any ofe your Cokes. I have heard ... things.

Bite the wax tadpole, American peeg dog!
 
2010-03-09 10:42:28 PM
Goodfella: minnesotaboy: Oh yes, we own you round-eyes. Now bring me a beer before I decide to foreclose on your whole white chubby country!



It's 'owlie' (as in an owl), not 'round-eye'. At leasts that's what they called us in Hawaii.


Actually that's haole (new window)
 
2010-03-09 11:56:51 PM
Cha Chink!
 
2010-03-10 03:02:07 AM
Linux_Yes: Communist China are liars.

communist china built a time machine and came to the future to lie to us?

or did you mean the "communist" china of today?

/a bit of red cloth on a stick isnt enough
 
2010-03-10 08:13:26 AM
netweavr: Translation: Politician's play politics and use rhetoric. When push comes to shove, however, we're businessmen, not stupid.

Which is why China and India are buying gold as fast as they can without making the price go ballistic. That and China diverting its domestic gold production into its vaults.

The longer they can keep the game going, the more gold both will control. When the dollar bubble pops, their foreign reserves will lose value and their gold reserve will increase in value.

Will it hurt China? Yes. It will devastate the US though. China can de-peg. We're stuck with the dollar.
 
2010-03-10 08:57:56 AM
jso2897: O, seriously, you mean? Well, maybe. Certainly, the Chinese have a lot invested in keeping the dollar strong, and they're kind of faced with a Hobson's choice - if the U.S. economy tanks into full depression, complete with currency deflation, they'll get that - but lose their biggest market. If, on the other hand, we do recover quickly, the inflationary pressure will be fierce - and no matter how they want not to, at some point they'll have to float the yuan - which is going to really suck for them, to put it mildly. In that scenario too, they would lose a lot of our trade. Their best hope lies somewhere between the two.

Apparently, the Chinese view is that letting the Yen rise was the ultimate source of Japan's troubles. They want to avoid a repeat of the Japanese situation at all costs, because they might not be able to handle the political consequences of a long recession. So yeah, they're going to try for somewhere between the two.

But their problems are bigger than a currency imbalance. I think it's pretty optimistic to assume that consumption in the US will bounce back to its previous levels. At the same time some people are arguing that China have simply over-invested in industrial capacity and are looking forward to a bunch of empty factories and a collapse of their construction industry.

Their only solution at this point is for the Chinese to start spending their money and start buying some of their own goods.
 
2010-03-10 12:55:40 PM
Ned Stark: Linux


China is government by the Communist Party of China, numbnuts.
 
2010-03-10 04:41:40 PM
Linux_Yes: Ned Stark: Linux


China is government by the Communist Party of China, numbnuts.


and even Maoists denounce them as a rightist deviation. they can call themselves communist all they want but when the country if full of free trade zones and private businesses in "special relationships" with the government it rings a little hollow.
 
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