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The Bush administration has sold China billions worth of our spiraling debt.
China’s stake in our nation’s finances is significant because it is using its holdings to undervalue the American dollar and manipulate its own currency.
China has undervalued it's currency by 40%. They can basically manufacture products 40% cheaper than we can, and that's where manufacturing jobs are going.
That helps the Chinese economy grow and takes jobs away from U.S. manufacturers, but it also essentially gives China control over our economy.
Your thoughts?
I'd like to hear from the, "Nobody else in the world will control our decisions" crowd.
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You can't ride home on a bowl of goat.
I've always said that.
China’s stake in our nation’s finances is significant because it is using its holdings to undervalue the American dollar and manipulate its own currency.
China has undervalued it's currency by 40%. They can basically manufacture products 40% cheaper than we can, and that's where manufacturing jobs are going.
That helps the Chinese economy grow and takes jobs away from U.S. manufacturers, but it also essentially gives China control over our economy.
enlighten me? i dont understand your post as it relates to the thread title?
Your thoughts?
I'd like to hear from the, "Nobody else in the world will control our decisions" crowd.
enlighten me? i dont understand what you posted as it relates to the thread title?
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“They said the road comes through Seattle. We came through here and took care of business.” Anquan Boldin
Economically speaking - China has been keeping their currency undervalued for longer than a decade.
True, and it's worked for them. But they've never owned this much of our economy.
Last year a fifth of our debt was owned by foreign countries, and since 2001 China has bought by far the most, $177B in the first seven months alone of last year.
What happens if China decides to sell this upon some hypothetical disagreement with the US? China has traditionally not been shy about who they do business with. Say, North Korea? Saudi Arabia?
Where's Sir Stephan and his "Go ahead and invade North Korea, China won't do anything with Bush in charge" version of foreign policy?
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You can't ride home on a bowl of goat.
I've always said that.
True, and it's worked for them. But they've never owned this much of our economy.
Last year a fifth of our debt was owned by foreign countries, and since 2001 China has bought by far the most, $177B in the first seven months alone of last year.
What happens if China decides to sell this upon some hypothetical disagreement with the US? China has traditionally not been shy about who they do business with. Say, North Korea? Saudi Arabia?
Where's Sir Stephan and his "Go ahead and invade North Korea, China won't do anything with Bush in charge" version of foreign policy?
Uhhhhh Section 11. North Korea can't even afford toilet paper. I don't know where they'd get the money to buy the kind of debts we rack up. And Saudi Arabia? They get too uppity and we'll just march over there from Iraq.
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“So I became a newspaperman. I hated to do it but I couldn’t find honest employment.” —Mark Twain
I can only give a brief response (since I got to pick up the kiddies at the sitter).
You and Chaz are correct that the next U.S. President will inherit the nation's biggest overdraft on record and may have little choice but to marshal support from the world's top economic powers to avoid a payments crisis.
Some folks say Kerry may be better positioned to bring other countries on board for such an effort. Obviously Bush's attempts at consensus are not working.
The only short-term safety valve, it seems, is a slide in the dollar that would make US exports less pricey, imports more expensive and US assets cheaper to buy.
But economists are giving warnings that it could punish the world economy if allowed to get out of hand. It risks undermining export-dependent economies such as Japan, China and Germany and may even accelerate the pace of US interest rate rises.
The key players in this are Asia's central banks (japan and china). The have a policy of resisting any attempts to devalue their dollar by matching it with their currency in order to protect their exports - this in turn has exaggerated the deterioration in world finances.
Oh and one more thing - the roots of the blowout debt have been associated with the tax cuts, spending hikes and interest rate cuts. This has what been used by the Bush administration to protect the american households from a series of economic and political shocks.
In essence all three have worked to cushion the US economy from the dotcom bubble burst, the September 11 attacks, the Iraq invasion and - so far - a doubling of oil prices. The current pattern generated has American households spending, the rest of the world exporting and the US Government borrowing. But the result has produced a rising US dependence on foreign money.
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