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(Global Geopolitics)   US set to undertake the largest modernisation of its infrastructure since the 1950s, with Chinese investors looking to fit the $8 trillion bill   (glblgeopolitics.wordpress.com) divider line 94
    More: Interesting, Chinese, infrastructure, United States, Chinese investors, late-2000s recession, U.S. Chamber of Commerce, investors  
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3319 clicks; posted to Business » on 25 Oct 2013 at 7:16 AM (42 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-10-25 04:38:36 AM
Fit that bill.

www.theworldofchinese.com
 
2013-10-25 07:20:37 AM

Kujira: Fit that bill.

[www.theworldofchinese.com image 650x400]


Did not come here for this but leaving very satisfied.
 
2013-10-25 07:26:35 AM
I don't understand the article at all. Who is borrowing the $8t from china to modernize infrastructure?
 
2013-10-25 07:31:15 AM
Worked the last time.

2.bp.blogspot.com

/1 ticket please.
 
2013-10-25 07:33:39 AM

Debeo Summa Credo: I don't understand the article at all. Who is borrowing the $8t from china to modernize infrastructure?


I think it's saying we (feds/local municipalities) need to turn to Chinese investors if we hope to get it done. So we may get some interesting highway names, and everything will have a toll. This is what small government is.
 
2013-10-25 07:39:40 AM

Debeo Summa Credo: I don't understand the article at all. Who is borrowing the $8t from china to modernize infrastructure?


Yeah, the headline and the article don't exactly match.  The guy is just postulating that the US is going to need to spend $8 billion over the next 17 years in infrastructure improvements and thinks that municipal governments will turn to China for some reason for that money.

It's an opinion piece.
 
2013-10-25 07:42:57 AM
The Teahadists will prevent any significant government expenditures on infrastructure until their lights and water go out. Then it will be all Obama's fault.
 
2013-10-25 07:43:29 AM
It's this or higher taxes and we know people HATE taxes.  So make sure you send a thank you to a bunch of Chinamen.
 
2013-10-25 07:43:51 AM
Where are they going to fit an 8 trillion dollar bill?I assume something like that would be larger than a standard banknote?
 
2013-10-25 07:56:14 AM
The worst part about relying on chinese investors is that an hour later you'll need to do it again.
 
2013-10-25 07:57:10 AM

HotWingConspiracy: Debeo Summa Credo: I don't understand the article at all. Who is borrowing the $8t from china to modernize infrastructure?

I think it's saying we (feds/local municipalities) need to turn to Chinese investors if we hope to get it done. So we may get some interesting highway names, and everything will have a toll. This is what small government is.


Outrageous! Only 'Merican big businesses should profit from tolls, not furreners!
 
2013-10-25 07:59:22 AM

HotWingConspiracy: Debeo Summa Credo: I don't understand the article at all. Who is borrowing the $8t from china to modernize infrastructure?

I think it's saying we (feds/local municipalities) need to turn to Chinese investors if we hope to get it done. So we may get some interesting highway names, and everything will have a toll. This is what small government is.


It would be the opposite of small government. Local governments would turn to Chinese investors to fund the infrastructure spending.

But again, TFA is unclear. It seems to be correctly observing that municipalities are currently over leveraged, which TFA seems to think means they'll need to borrow more (from the Chinese apparently). Doesn't make logical sense.
 
2013-10-25 08:00:14 AM
The free market will build the roads or repair them if needed. Government doesn't create jobs or do anything but waste our money

True story
 
2013-10-25 08:02:41 AM
The worst part about relying on chinese investors is that an hour later you'll need to do it again.

Heehee! The classics always deliver!
 
2013-10-25 08:04:03 AM
Why would we need to turn to the Chinese specifically? If cities and states want to sell bonds fine, but there will be plenty of other interested investors. The Chinese only own around 7-8% of our federal debt (and decreasing), so it's not like there aren't other parties who invest in American debt. Plus, demand is still strong as evidenced by the rock-bottom muni rates out there -- there is plenty of demand from American investors and no reason to target foreign investors from any country specifically.
 
2013-10-25 08:04:04 AM

Debeo Summa Credo: HotWingConspiracy: Debeo Summa Credo: I don't understand the article at all. Who is borrowing the $8t from china to modernize infrastructure?

I think it's saying we (feds/local municipalities) need to turn to Chinese investors if we hope to get it done. So we may get some interesting highway names, and everything will have a toll. This is what small government is.

It would be the opposite of small government. Local governments would turn to Chinese investors to fund the infrastructure spending.


No, this is small government. Can't raise taxes because of powerful weirdos that want to kill our government via starvation, but it turns out that things still cost money.

But again, TFA is unclear. It seems to be correctly observing that municipalities are currently over leveraged, which TFA seems to think means they'll need to borrow more (from the Chinese apparently). Doesn't make logical sense.

They don't and never will have the cash to do it on their own, and you're not going to find 8 trillion laying around in America. The money has to come from somewhere, and wealthy Chinese investors would love to dip their toes in to our domestic markets. They'll put up the cash, and you'll pay them directly to use their roads because again, can't raise taxes to pay back what we borrow.
 
2013-10-25 08:04:10 AM
The article is saying that the  demand for investment capital is an opportunity for anyone who has a  supply of investment capital. China has investment capital that it desperately needs to do something with, ergo China is going to invest in the US.
 
2013-10-25 08:04:53 AM

the8re: Worked the last time.

[2.bp.blogspot.com image 480x347]

/1 ticket please.


Problem is that this time the roles will be reversed.
 
2013-10-25 08:05:39 AM

GoodyearPimp: It's this or higher taxes and we know people HATE taxes.  So make sure you send a thank you to a bunch of Chinamen.


That infrastructure really tied the country together.
 
2013-10-25 08:09:12 AM

HotWingConspiracy: They don't and never will have the cash to do it on their own, and you're not going to find 8 trillion laying around in America. The money has to come from somewhere, and wealthy Chinese investors would love to dip their toes in to our domestic markets.


You could find $8 trillion if you wanted to. I actually don't know if the Chinese could come up with it alone, but I bet Americans could. According to wikipedia there's about $37T of American bonds (federal/muni/corporate) currently on the market, and interest rates are low as demand has been high. Obviously this is as much speculation as the original article, but I'd bet you could float $0.5T of bonds each year for 14 years and find enough buyers in America. Interest rates would go up, and I don't know how much, but it could be done.
 
2013-10-25 08:11:07 AM

GoodyearPimp: It's this or higher taxes and we know people HATE taxes.  So make sure you send a thank you to a bunch of Chinamen.


So instead of paying for the infrastructure improvements we'll get to pay for the infrastructure improvements plus interest.  Yeah fiscal responsibility!
 
2013-10-25 08:11:26 AM

GoodyearPimp: It's this or higher taxes and we know people HATE taxes.  So make sure you send a thank you to a bunch of Chinamen.


www.thatfilmguy.net
 
2013-10-25 08:13:55 AM

the_rhino: Where are they going to fit an 8 trillion dollar bill?I assume something like that would be larger than a standard banknote?


Obama could just mint 8 coins and pay cash.
 
2013-10-25 08:18:35 AM

HotWingConspiracy: Debeo Summa Credo: HotWingConspiracy: Debeo Summa Credo: I don't understand the article at all. Who is borrowing the $8t from china to modernize infrastructure?

I think it's saying we (feds/local municipalities) need to turn to Chinese investors if we hope to get it done. So we may get some interesting highway names, and everything will have a toll. This is what small government is.

It would be the opposite of small government. Local governments would turn to Chinese investors to fund the infrastructure spending.

No, this is small government. Can't raise taxes because of powerful weirdos that want to kill our government via starvation, but it turns out that things still cost money.

But again, TFA is unclear. It seems to be correctly observing that municipalities are currently over leveraged, which TFA seems to think means they'll need to borrow more (from the Chinese apparently). Doesn't make logical sense.

They don't and never will have the cash to do it on their own, and you're not going to find 8 trillion laying around in America. The money has to come from somewhere, and wealthy Chinese investors would love to dip their toes in to our domestic markets. They'll put up the cash, and you'll pay them directly to use their roads because again, can't raise taxes to pay back what we borrow.


They don't have $8t lying around in china either. If they did, where is it invested now? What is stopping them from buying municipal debt today?

From the original article:

A typical Chinese investor wanted to invest in a US city with good financial standing, said Mao. "I doubt Chinese investors are interested in places like Detroit [which went bankrupt]," he added.

My point is, if municipalities wanted to invest in infrastructure, then they would issue more debt (that would at least partly be bought by foreign investors, including China). But arguing that municipalities can't do it on their own because they are already overleveraged, as TFA cites as support for its view that china will have to foot the bill, is nonsensical.

If municipalities are already overleveraged, why is borrowing more from china a viable fix? If TFA is saying we'll have to borrow more and a lot of that borrowing had to come from china, arguing that municipalities already have too much debt is superfluous or contradictory.
 
2013-10-25 08:20:28 AM

Debeo Summa Credo: why is borrowing more from china a viable fix?


If the money is cheap, you can leverage more. It's the same reason people refinance their homes- they can get a better interest rate and reduce their payments, even though their total leverage increases.
 
2013-10-25 08:22:54 AM

dukeblue219: The Chinese only own around 7-8% of our federal debt (and decreasing), so it's not like there aren't other parties who invest in American debt.


I thought the Chinese were bailing out of holding American debt as quickly as the can w/o destabilizing or taking a major loss - and at the same time pushing to remove the American dollar as the 'gold standard'.

If they manage to accomplish both*, wouldn't that make holding US debt... unattractive?
8 trillion in junk bonds?

* I personally think it would take something truly stupid like - defaulting on our debts for political leverage - before the rest of the world would go along with the idea of dumping greenbacks. Figure the odds. :>/
 
2013-10-25 08:27:05 AM

HotWingConspiracy: you're not going to find 8 trillion laying around in America



Our GDP is 15.5 trillion so I think we can afford 8 trillion over 16 years for badly needed commerce and sanitation infrastructure.
 
2013-10-25 08:36:40 AM

phansen: HotWingConspiracy: you're not going to find 8 trillion laying around in America


Our GDP is 15.5 trillion so I think we can afford 8 trillion over 16 years for badly needed commerce and sanitation infrastructure.


We can afford a lot of shiat that we cannot and will not ever have due to politics. It took us 3 years to get a highway bill passed, and it barely addressed what we actually need.
 
2013-10-25 08:36:40 AM
Now I want lo mein.
 
2013-10-25 08:48:18 AM
http://en.m.wikipedia.org/wiki/Foot_the_bill

Huh.
 
2013-10-25 08:50:57 AM

Cajnik: GoodyearPimp: It's this or higher taxes and we know people HATE taxes.  So make sure you send a thank you to a bunch of Chinamen.

[www.thatfilmguy.net image 850x567]


Walter, this isn't a guy who built the railroads here. This is a guy... oh wait.
 
2013-10-25 08:52:31 AM

HotWingConspiracy: phansen: HotWingConspiracy: you're not going to find 8 trillion laying around in America


Our GDP is 15.5 trillion so I think we can afford 8 trillion over 16 years for badly needed commerce and sanitation infrastructure.

We can afford a lot of shiat that we cannot and will not ever have due to politics. It took us 3 years to get a highway bill passed, and it barely addressed what we actually need.


This. Mathematically, it's not difficult to find a solution to this problem... politically, there's a whole party devoted entirely to the idea that paying for things is evil. Ergo, it'll never happen.

We NEED $8t in infrastructure improvements. We'll GET about $2t, max.
 
2013-10-25 08:58:48 AM

Rhino_man: We NEED $8t in infrastructure improvements. We'll GET about $2t, max.


That's okay, though, because infrastructure investment has no relationship to the strength and vigor of our economy. The growth of the interstate highway system had absolutely no impact on the US as an economic superpower in the 20th century, nor did the rapid growth and government support for air transport. And don't get me started on the Internet. That had no economic impact  at all.
 
2013-10-25 08:59:46 AM

Muta: the_rhino: Where are they going to fit an 8 trillion dollar bill?I assume something like that would be larger than a standard banknote?

Obama could just mint 8 coins and pay cash.


But those 8 coins would be so big they could sink the Titanic.

//or so I was infromed.
 
2013-10-25 09:21:31 AM

Donnchadha: Walter, this isn't a guy who built the railroads here. This is a guy... oh wait.


The Chinaman is not the issue here, dude.
 
2013-10-25 09:32:28 AM

t3knomanser: The article is saying that the  demand for investment capital is an opportunity for anyone who has a  supply of investment capital. China has investment capital that it desperately needs to do something with, ergo China is going to invest in the US.


Get your stinking facts out of here buddy!  This is obviously a thread for this idiot blogger make sweet chicken loving for all of Farkdom to see.
 
2013-10-25 09:34:00 AM
Does someone want to explain to me why we're not raising taxes to pay for badly needed new/upgraded infrastructure instead of borrowing from the Chinese?
 
2013-10-25 09:35:52 AM
Infrastructure spending is soshulizm!
 
2013-10-25 09:39:42 AM

Dancin_In_Anson: Problem is that this time the roles will be reversed.


I don't see that as a problem.  It's the free market at work. You have money, you pay people to work for you.
 
2013-10-25 09:43:39 AM
I don't understand this article. Are th emunicipalities going to issue more debt which China is poised to buy?

What does it matter who buys it? The issuer sets the terms.
 
2013-10-25 09:44:48 AM

imashark: Does someone want to explain to me why we're not raising taxes to pay for badly needed new/upgraded infrastructure instead of borrowing from the Chinese?


Because, you see, the wealth will trickle down. But only if we don't tax it.  Taxation is... well it's cold.  And it freezes all the trickle-down wealth.  But if the wealthy aren't taxed, then the wealth trickles down like a warm shower.

/ I desperately want Obama to say "95% of the wealth gains in this country over the recovery went to the 1%.  The stock market is breaking records.  If your 'trickledown' theory were true, then most Americans would be somehow benefiting from this recovery.  They're not, because the wealthy are hoarding their money.  Your way doesn't work. We're going to do it my way"  Then whip his dick out and slap the Teahadists across the face.
 
2013-10-25 09:56:48 AM

phansen: HotWingConspiracy: you're not going to find 8 trillion laying around in America


Our GDP is 15.5 trillion so I think we can afford 8 trillion over 16 years for badly needed commerce and sanitation infrastructure.


Bbbbut....

That might mean the Holy Job Creatorstm will have to give up their tax breaks, and will have to keep sending
more jobs overseas because AMERICA!
 
2013-10-25 10:01:15 AM
This brings up something else: do we even have the people to do all the work we need?  They're using the Chinese to build bridges in San Fransisco...  The government could do worse than opening up a crash course school in various public works professions and sending people through it for free with multiyear commitments to projects.
 
2013-10-25 10:12:21 AM
Despite the fancy "Global Geopolitics" name, this is just some dudes crappy blog.
 
2013-10-25 10:14:55 AM
i hate to say it, because i like the idea of a pension (and I plan on working for the government)... but, every city has or is going to have problems with their pension plans.  basically, they wrote checks back in the 50s (or whenever) that they can't cash today.  maybe dropping the pension and moving towards 401ks or some similar retirement vehicle is the only feasible way to move forward, and still attract talent to work for the government.

/ i've also done work representing pension plans, and I don't know what it is about them, but they suck at investing.  it's like they enjoy throwing money away.  i guess it doesn't matter to them, a perpetually supplemented fund... maybe they feel like they can take more risk.  that is not a good set of circumstances for sound investing.
 
2013-10-25 10:16:12 AM

pivazena: / I desperately want Obama to say "95% of the wealth gains in this country over the recovery went to the 1%. The stock market is breaking records. If your 'trickledown' theory were true, then most Americans would be somehow benefiting equally from this recovery.


Careful how you phrase this to the teahadists. You say "somehow benefiting" they're liable to come back with some nonsense about refrigerators.
 
2013-10-25 10:21:17 AM

pute kisses like a man: / i've also done work representing pension plans, and I don't know what it is about them, but they suck at investing.


While I've not been invested in a pension plan, nor does it seem likely that I will ever be a part of one, it seems to me the managers of such plans think that they need to get higher returns for their money than doing what boringly works.

It probably would be better for them to invest partially in the company (to encourage long-term planning and growth by employees) and partially in an index fund to get the best security and growth potential while avoiding management fees.

/Seems like a no-brainer, really.
//Pension managers don't do it probably because it's boring.
 
2013-10-25 10:29:17 AM

pivazena: imashark: Does someone want to explain to me why we're not raising taxes to pay for badly needed new/upgraded infrastructure instead of borrowing from the Chinese?

Because, you see, the wealth will trickle down. But only if we don't tax it.  Taxation is... well it's cold.  And it freezes all the trickle-down wealth.  But if the wealthy aren't taxed, then the wealth trickles down like a warm shower.

/ I desperately want Obama to say "95% of the wealth gains in this country over the recovery went to the 1%.  The stock market is breaking records.  If your 'trickledown' theory were true, then most Americans would be somehow benefiting from this recovery.  They're not, because the wealthy are hoarding their money.  Your way doesn't work. We're going to do it my way"  Then whip his dick out and slap the Teahadists across the face.


This needs to happen at the end of every speech Obama gives from now on.
 
2013-10-25 10:35:31 AM
IMO, infrastructure is one of the best things you can invest in, and one of the primary reasons for government to exist in the first place.
 
2013-10-25 10:43:58 AM

Debeo Summa Credo: I don't understand the article at all. Who is borrowing the $8t from china to modernize infrastructure?


More to the point, how does one invest in infrastructure? I mean, I know that a federal, state, or local government can invest in their own infrastructure, expecting dividends in the future. How, though, do I go about investing in it? Or did TFA just use the word "invest" when they mean "loan"?

*Yes, I know that in some sense all investment is effectively a loan. If TFA means simply that the Chinese are likely to buy bonds to fund projects, they did a sh*t job of saying it.
 
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