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Thread: U.S. should be wary of offending its biggest lender - China

  1. #1

    U.S. should be wary of offending its biggest lender - China

    [QUOTE]NEW YORK: Is it risky for a big borrower to offend its largest lender? China, which is the subject of increasing protectionist pressures in the United States, is not only the largest contributor to the large American trade deficit. It is also the largest lender to the United States.

    Last year, when the U.S. Treasury debt increased by $184 billion, almost half of that amount - $87 billion, or 47 percent of the total - was provided by lenders in China, according to U.S. government statistics.

    With other foreigners buying large amounts of Treasury debt and the U.S. Federal Reserve buying nearly a fifth of the newly issued bonds, [B]only 4 percent of the money came from American investors and institutions.[/B] U.S. banks were net sellers of Treasuries, as were individual Americans.

    With variations, [B]the same trends have persisted since 2002, when the U.S. government again began adding to the national debt, after a brief period of paying debt down.[/B]

    For the five-year period, foreigners picked up two-thirds of the $1.5 trillion in additional national debt, with China taking about a third of the foreign total. The Federal Reserve, which is part of the government but treated as if it were not, took about a sixth of the debt, and Americans took the rest.

    [COLOR=Red][B]In that way, the Bush administration debt has been very different from that of the Reagan administration, which from 1981 to 1988 added $1.35 trillion.[/B][/COLOR]

    Then the Fed took a smaller share, about 8 percent, and foreigners bought only a sixth of the debt. The rest was purchased by Americans, and when defenders of the national debt told worriers that it was "just money we owe to ourselves," they had a point.

    China now has the money to buy bonds because of the large and rising trade surplus it runs with the world, and particularly with the United States. By American figures, China's surplus in bilateral trade of goods last year was almost $233 billion. By China's measurement, it was $144 billion. Either way, it was very large.

    Although protectionist tendencies in the United States do not break perfectly along party lines, some Democrats have been more vocal in urging action against what they see as unfair trade from China, and the change in control of Congress may have played a role in the Bush administration's decision to take two trade disputes to the World Trade Organization and to impose countervailing duties in a third.

    For China, a trade war with a major buyer of its goods would present clear risks, and it is far from clear that it would benefit if it took, or even threatened, financial retaliation.

    A Chinese decision to sell large amounts of Treasuries - or even to stop buying - could drive the dollar down sharply. It would also be likely to raise interest rates in this country, perhaps slowing the economy and reducing demand for Chinese products. Few think China will take such risks.

    Nonetheless, the Bush administration does find itself dependent on foreigners, most particularly China, to keep financing U.S. government spending.[/QUOTE]

    [url]http://www.iht.com/articles/2007/04/13/news/wbmarket14.php[/url]

    Borrow and spend republicans. Creators of large debts that now endanger the USA

  2. #2
    Jets Insider VIP
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    china today.....japan twenty years ago....same leftist sh!t...different day.....

  3. #3
    [QUOTE=Come Back to NY]china today.....japan twenty years ago....same leftist sh!t...different day.....[/QUOTE]

    The simplistic argument,


    [QUOTE]Then the Fed took a smaller share, about 8 percent, and foreigners bought only a sixth of the debt. The rest was purchased by Americans, and when defenders of the national debt told worriers that it was "just money we owe to ourselves," they had a point.[/QUOTE]

    [QUOTE][B]Nonetheless, the Bush administration does find itself dependent on foreigners, most particularly China, to keep financing U.S. government spending. [/B] [/QUOTE]

    Tough road to be on. Like Shakespeare says "borrowing dulls the edge of husbandry"

  4. #4
    Jets Insider VIP
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    [QUOTE=Jetdawgg]The simplistic argument,

    [/QUOTE]

    simplistic arguement???

    more like reality and history....

  5. #5
    Listening to a flaming socialist liberal like JetDawgg complain about Republican spending is the ultimate in hilarious hypocritical irony.

    Yes, the Repubs may be doing a crappy job, but do you really think the Dems would be any better at controlling their spending? Please......they'd just tax us all at 75%+ if they thought they could.

  6. #6
    [QUOTE=Come Back to NY]simplistic arguement???

    more like reality and history....[/QUOTE]

    The sad part is that the deficit is getting worse and the countires we borrow from become larger.

    We are losing our independence.

  7. #7
    [QUOTE=Jetdawgg]The sad part is that the deficit is getting worse and the countires we borrow from become larger.

    We are losing our independence.[/QUOTE]
    We owe them the money. They're dependent on us. They have more to lose. If we can't pay them back, they lose out. Why is this hard to understand?

  8. #8
    [QUOTE=BrooklynBound]We owe them the money. They're dependent on us. They have more to lose. If we can't pay them back, they lose out. Why is this hard to understand?[/QUOTE]
    Because he isn't talking about money, he's talking about politics, or at least trying to.

    What would flip me out would be if Jetdawgg started understanding anything. Whenever he ventures off the path of his dailykos kut n' pastes he usually ends up bemoaning an America that used to guillotine its own citizens.

    For shame!

  9. #9
    Should we care that China is a communist country?

  10. #10
    Bewildered Beast
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    [QUOTE=Jetdawgg]The sad part is that the deficit is getting worse and the countires we borrow from become larger.

    [B]We are losing our independence[/B].[/QUOTE]
    Dude...just stop.

    There is no "independence" when the markets are global. China isn't the kid who beat your ass because you forgot to pay him back. China is a dance partner; and she is in for some growing pains. However, China will find developing an infrastructure easier than us; cells phones require no mammoth infrastructure.

  11. #11
    Jets Insider VIP
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    [QUOTE=Warfish]Yes, the Repubs may be doing a crappy job, but do you really think the Dems would be any better at controlling their spending? Please......they'd just tax us all at 75%+ if they thought they could.[/QUOTE]


    I know the Republicans do _______________, but look at how the Democrats do ______________.

    And it was just the one time that Republicans ________________, look at all the times the Dumbocrats _________________.

    Two _____________ definitely make a _______________.

  12. #12
    It's quite true, if push came to shove the US could simply promote inflation and then the 'real value' of the debt would plummet. I'm not sure how well double/triple digit inflation figures would go down with John and Josephine Citizen, but it definitely would be a solution.....

    At the moment both the US and China have a symbiotic relationship going on; China is happy for the US to rack up debt provided a fair bit of it is used to purchase Chinese goods. You also have to remember that the US economy dwarves the Chinese one, even if the Chinese economy is growing at a fair clip. The US has a big debt, but at the moment they have an economy that can handle it - if it ever comes to the stage that the US can't handle it, places like China will probably suffer more than any citizen of the States. The saying if the US sneezes the rest of the world catches a cold is still true.

  13. #13
    We should all be intimidated that China is letting capitalism run rampant and the free flow of capital is creating growth, new opportunities to invest in and 100s of millions of new middle class consumers who can ultimately buy product from us.

    The reality is as more countries follow the US model they will free their economies to grow at much faster rates than the ever could before. It will create a far more competitive world which will benifit consumers drive innovation, reduce poverty and create new opportunities for investors all over the world.

    The reason we fought the cold war and won was our ability to out produce inefficient left wing economies. Now that those countries are freeing up their economic systems, they are bound to do better and grow at much faster rates than ever before. Hard to believe that now that it's obvious that the free flow of capital actually works, the left in this country is going to advocate restricting freedom to protect our economy.

  14. #14
    China still has a ways to go yet, Winston!!

    The Chinese banking sector is still a mess of red tape and byzantine regulation. Corruption is still a huge problem; the economy is still a command economy in name and in some areas still in practice. There are problems in some parts of China that are inconcievable in places like the USA - like having full service electricity 24/7. There are obviously still huge restrictions on personal freedoms; it is a big worry to me that if you asked someone from the CIA who has the best intelligence service in the world they'll tell you its the Chinese.

  15. #15
    [QUOTE=Black Death]China still has a ways to go yet, Winston!!

    The Chinese banking sector is still a mess of red tape and byzantine regulation. Corruption is still a huge problem; the economy is still a command economy in name and in some areas still in practice. There are problems in some parts of China that are inconcievable in places like the USA - like having full service electricity 24/7. There are obviously still huge restrictions on personal freedoms; it is a big worry to me that if you asked someone from the CIA who has the best intelligence service in the world they'll tell you its the Chinese.[/QUOTE]


    I've been to China at least 10 times now as screwed up as much of it is, it is ownership and free market economy that is driving that countries growth.

  16. #16
    Can't stand the spitting myself, nor the food. Too much tripe and offal.

    I have an alternate view: I think the public sector is responsible for a lot of the growth, though it is true much of this growth is coming from the reforming process.

  17. #17
    [QUOTE=Winstonbiggs]We should all be intimidated that China is letting capitalism run rampant and the free flow of capital is creating growth, new opportunities to invest in and 100s of millions of new middle class consumers who can ultimately buy product from us.

    The reality is as more countries follow the US model they will free their economies to grow at much faster rates than the ever could before. It will create a far more competitive world which will benifit consumers drive innovation, reduce poverty and create new opportunities for investors all over the world.

    [B]The reason we fought the cold war and won was our ability to out produce inefficient left wing economies[/B]. Now that those countries are freeing up their economic systems, they are bound to do better and grow at much faster rates than ever before. Hard to believe that now that it's obvious that the free flow of capital actually works, the left in this country is going to advocate restricting freedom to protect our economy.[/QUOTE]


    Winny, with this being stated you make it appear that the US is the NWO. I got an email recently attempting to make that case.

    Having been to China myself and having several Chinese companies that I partner with, I am somewhat hesitant to do a lot of business with them for now. The corruption is rampant.

    They do make cheaper products though. The price point is amazing. Makes my margins much better :)

    Here is Jim Webb regarding your last statement:[url]http://www.opinionjournal.com/editorial/feature.html?id=110009246[/url]

    I have to agree with him here. This global economy thing may work, but at what cost?

  18. #18
    [QUOTE=Black Death]Can't stand the spitting myself, [B]nor the food. Too much tripe and offal. [/B]

    I have an alternate view: I think the public sector is responsible for a lot of the growth, though it is true much of this growth is coming from the reforming process.[/QUOTE]

    ....and the chicken with little chopped up bones in it :yes:

  19. #19
    [QUOTE=Jetdawgg]Winny, with this being stated you make it appear that the US is the NWO. I got an email recently attempting to make that case.

    Having been to China myself and having several Chinese companies that I partner with, I am somewhat hesitant to do a lot of business with them for now. The corruption is rampant.

    They do make cheaper products though. The price point is amazing. Makes my margins much better :)

    Here is Jim Webb regarding your last statement:[url]http://www.opinionjournal.com/editorial/feature.html?id=110009246[/url]

    I have to agree with him here. This global economy thing may work, but at what cost?[/QUOTE]

    I know you agree with him. The leftist mantra is basically we are weak Pusey's and can't compete in an open world. Guess what in the real world if your not worth what your getting paid eventually you get found out. The party is over for those of us hiding behind seniority, unions, management, tenure, etc. Either produce to a level that pays you what you want or need or suffer the consequences.

  20. #20
    [QUOTE=Winstonbiggs]I know you agree with him. The leftist mantra is basically we are weak Pusey's and can't compete in an open world. Guess what in the real world if your not worth what your getting paid eventually you get found out. The party is over for those of us hiding behind seniority, unions, management, tenure, etc. Either produce to a level that pays you what you want or need or suffer the consequences.[/QUOTE]

    Do you see the weight problem a lot of Americans have? Now imagine that being a view of the people in the "party" you just mentioned.

    Not pretty is it?

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